Tension between Ukraine and Russia has been rising for several weeks. Everyday you can hear all the media saying how the conflict is bringing the Russian stock market down. But did we need a war in order to predict this decline? Well, if we were fundamental analysts, the answer would have been undoubtedly “yes”. But everything an Elliott Wave analyst needs is a price chart. We have one of the Russian MICEX index below, where you can see that the last major top was made on the 10th of April 2011. Prices were unable to reach that level ever since, regardless of the absence of war during that 3-year period.
Furthermore, the decline from April to October 2011 is in five waves for (A). A contracting triangle developed for wave (B), so we have had all the evidence to expect another decline, with or without a war. In conclusion, this situation provides us with one more example of news and events lagging the market, just as the science of Socionomics postulates.
Chart by: www.investing.com
