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Is another Arab Spring lurking ahead?

The Arab Spring is a wave of revolutions, demonstrations and civil conflicts, which struck mainly Tunisia, Egypt, Libya, Yemen and Syria during 2010 – 2013. Mostly, people were angry with decades of dictatorship and the violation of basic human rights. Many leaders had been forced from power. Egypt’s Hosni Mubarak, who held office for almost 30 years, resigned in 2011. Libya’s Muammar Gaddafi ruled for over 42 years until 2011, when he was killed by the crowd.

egypt arab spring

There were some major changes in Northern Africa during the Arab Spring, no doubt about that. But thirty or forty years is far too much time to wait, when humanism and freedom are being destroyed.  So the right question seems to be “what took people so long?” To answer it, we will look at history from a little different point of view. A socionomic point of view.

The new science of Socionomics, founded by Robert Prechter Jr., postulates that social mood drives financial, macroeconomic, POLITICAL AND SOCIAL BEHAVIOR, in contrast to the conventional understanding that such events drive social mood. The best tool to register social mood is the market through its charts. Optimistic and happy people buy, while pessimistic, angry or afraid people sell. So each chart is nothing more, than an illustration of the psychological condition of the masses. This is especially true for the stock market indices. In our Socionomics section we already showed you how social mood, depicted on the charts, is linked to many of the major wars and conflicts throughout history.

Recommended reading: Socionomic perspective on wars and diseases

And as a modern example we provided you with a socionomic analysis of the riots in Brazil, which are in their peak right before the FIFA World Cup 2014.

Recommended reading: The World Cup, The Riots, The Market

But since the subject of this article is the Arab Spring, we will use the chart of Egypt’s EGX30 stock price index. It will show you under what conditions the conflicts took place and, what is more important, it will give us a hint about the probable future market direction – the probable future social mood direction.

arab spring

What took people so long, was the rising market – the natural cycle of social mood, which was in its positive phase until 2008. EGX30 was trading around 12 000 in 2008, before it crashed down to 3500 in early 2009. If we put an Elliott Wave labeling on the chart, we will see that this 8500 point decline is impulsive or in five waves. This means that the price action from 2009 until now is a natural three-wave correction. The socionomic theory states, that major protests, conflicts or wars tend to occur during the third phase of large-degree corrections, in other words, during wave C. As shown, the Arab Spring did occur in times of a bear market, but it was only wave “x” of “B”. The Middle East had always been a problematic region. Maybe that is the reason why the riots happened earlier than expected.

But we have another thing to worry about. So many young democracies in the whole region and the continuing tension in Syria are not suggesting for a stable and peaceful near future. According to the Wave Principle, five waves down for “A” and three waves up for “B”, means that wave “C” down should come next. If a small wave “x” brought so much violence, what could a major wave “C” bring?

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