Socionomics is the science of social prediction. By investigating social mood, reflected graphically on the financial markets, socionomists try to predict social behavior.
Social mood is also reflected in different fields like politics, culture, construction and many others. We can use those indicators to determine the trend of social mood, and what is more important – to identify a turning point.
Today we are presenting you the so-called “cannabis indicator”. Socionomics explains, that when social mood is negative, which means bear market conditions, people tend to tolerate substances like marijuana and alcohol. In the past 30 years of bull market marijuana stocks did not see any substantial growth. As for the plant – it has been under various restrictions due to positive social mood.
Since August last year marijuana stocks hit rock bottom and began a very slow uptrend. The start of 2014 gave a substantial upside momentum in price for the plant stocks. The Cannabis Stock Index exploded, signalizing for a possible 3rd wave in progress.
Is this an indication for a change in social mood, the start of a future bear market? History has proved tolerance to be only in bear market conditions.