Related Topics
Social Mood

How to Withstand the Siren Song of a Market Rally

by Editorial Staff
Updated: April 15, 2020

Dramatic rallies go hand-in-hand with dramatic bear markets. The psychology behind bear market rallies is powerful and tempting, seducing investors to fall feverishly back in love with the market at just the wrong time. How can you withstand this temptation? The first step is to be aware of it -- and its results. Consider this description of a major bear market's beginnings from the April issue of The Socionomist:

In the early stages of the falling transition, optimism will persist. While a general climate of social anxiety creeps in, the overriding attitude will be that any hardships encountered will be temporary inconveniences and that society will get "back to normal" soon. Each rebound in the stock market will be met with declarations that the bottom is in, that the worst is over and that happy times are here again to stay. It wouldn't be surprising to see the death of the bear market declared prematurely on numerous occasions and for politicians and monetary authorities to take credit for getting stocks and the economy back on track.

Falling prey to this psychology will be tempting. It's much more pleasant to think that good times are around the corner than it is to recognize that the odds point in the other direction. Furthermore, believing in the return of the large-degree positive mood trend will feel right. Rallies in bear markets can be vigorous, and the herding impulse is a master at fooling society at critical junctures time and again. After the initial leg down of the 1929 crash, stocks rallied strongly into 1930. No doubt many embraced the idea that the age of prosperity was on the cusp of returning when in fact it was the last chance to make a safe exit before the worst of the devastation -- in the stock market, the economy, politics and social life -- began. As a cautionary tale, consider that even as late as March 1931, the New York Times ran a headline declaring, "PROSPERITY'S RETURN; SIGNS OF IT APPARENT." Instead, the Great Depression was about to accelerate further.

200415 - Chart

It's not easy to guard your mind from the rally's siren song; yet, the step afterward is the most crucial -- and the most difficult. You have to act. Elliott Wave International's market forecasting services can help you prepare for changes in the market. To prepare for changes in your business, career, community and broader society, the Socionomics Premier Membership can help. Lean more in the page below.

Almost no one is ready for the ‘new normal’ in social life.

The world is changing fast. Entire countries are on lockdown. Interstate highways with little or no traffic. Empty stadiums, concert halls, bars and restaurants. Elections postponed. The Olympics postponed. Is this a temporary speedbump on the way to ever-greater prosperity, or are we seeing the beginning of a "new normal"? Get the answers you need and discover how to steel yourself for coming changes in the April 2020 issue of  The Socionomist, the flagship publication of the Socionomics Premier Membership.


The new science of socionomics starts with a simple observation: How people FEEL influences how they will BEHAVE.

At the Socionomics Institute, we look at how the whole society is feeling today – so you can anticipate how society will behave tomorrow. Using various indicators, we track social mood in real time across the globe. You’ll see how changes in social mood shift everything from the songs people want to hear to the leaders they elect; from people’s desire for peace to their hunger for scandals.

This is a rare, awe-inspiring insight. It’s what enables the Institute to help our members stay ahead of new trends that surprise almost everyone else.

Your Thinking Person’s Membership gives you this unrivaled perspective and puts you miles ahead of the herd.


Your Membership Resources Fall Into Three Categories:

12 issues per year, plus the entire 100+ issue archive ($1200 total value)

The Socionomist is dedicated to helping readers capitalize on social mood. Each month, our analysts show you how social mood is driving trends around the world. They identify upcoming turns and forecast bold new changes that no one else sees coming. Politics, popular culture, disease, family, religion, industry – they are all powered by social mood; The Socionomist shows you how so you can prepare for what’s ahead. No thinking person should be without this magazine.

5 Online Books ($227 total value)

With hundreds of charts and illustrations, this series introduces socionomics and demonstrates how social mood motivates social events, not the other way around:

The Wave Principle of Human Social Behavior (1999) – Learn how history unfolds in form-driven fractal waves. Value: $39.

Pioneering Studies in Socionomics (2003) – See how to apply socionomics in this sweeping volume of revealing case studies. Value: $39.

The Socionomic Theory of Finance (2016) – How macroeconomics and finance really work – It’s very different from what you learned in school! Value: $79.

Socionomic Studies of Society and Culture (2017) – Discover how you can anticipate and capitalize on trends in pop culture and broader society. #1 Amazon social theory bestseller! Value: $35.

Socionomic Causality in Politics (2017) – Grasp political trends in a new way by seeing exactly what propels them. Value: $35.

($299+ annual value)

You get a well-organized, full library of exclusive content. Plus, you get every new piece of content we release while you’re a member, including any book and DVD in digital format, as soon as it’s released; a virtual seat at any online event we host; a copy of any academic paper we release; and access to any available recording of speeches we make. Includes our Essential Mood Conference showcasing the most useful talks from the first six years of the Institute’s annual conference.

2-Month Introductory Offer

Try the Thinking Person's Membership for two months.

Price: $77

Annual Thinking Person's Membership

You get everything the Institute produces in a year.

Value: $1,696+

Price: $377 (Save 77%)

Five Cannabis Stocks, Five Opportunities Unfolded as Forecast

Q: What makes a good forecast even better? A: When it applies to five individual stocks instead of just one. See how this worked with our November cannabis stocks forecast.


Independent Scotland = Market Crash?

Scotland's independence is again a hot topic in Britain, with many observers saying that a break-up of the union would be bad for the country's financial markets. For a different look at causality -- i.e., chicken vs. the egg -- watch our Head of Global Strategy show you the current Elliott wave setup in EURGBP and FTSE.

Stocks vs. U.S. Births: Is There Really a Connection?

In a word, yes. A couple of decades ago, Robert Prechter plotted the number of annual births on a stock market chart and noticed a remarkable correlation. Except, it's not for the reasons you may think... Watch the Socionomics Institute's Director Matt Lampert and EWI's Robert Folsom dive into details.