The Idea that Peace and War Drive Stock Prices Is a Myth

By Elliott Wave International

Does an event as momentous as war affect the trend of the stock market?

Most people think so.

But the data don’t back it up.

Wars have no consistent causal effect on stocks: Sometimes the stock market rises during large-scale conflicts. Sometimes it falls. Sometimes it does both!

Just examine these charts:

There’s no reliable connection between war and stock prices. It’s a MYTH.

Chapters 1 and 2 of The Socionomic Theory of Finance debunk 12 more myths that most investors fall for.

You can read the chapters for FREE now.

This article was syndicated by Elliott Wave International and was originally published under the headline The Idea that Peace and War Drive Stock Prices Is a Myth. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Silver’s Volatility Is Flashing a Familiar Signal

By Elliott Wave International

Silver is living up to its reputation for volatility as the new year begins.

Silver’s one-month implied volatility has surged, a development that has historically coincided with important highs and lows in the metal’s price. Since 2020, similar volatility spikes have tended to appear near key turning points rather than during quiet, trending phases.

At the same time, the silver/gold ratio has also jumped, showing that silver began outperforming gold late in last year’s rally. In past cycles, sharp advances in this ratio have often accompanied tops in silver prices.

What makes the current setup notable is the interaction between these two measures. Spikes in volatility have frequently aligned with turning points in the silver/gold ratio, while spikes in the ratio itself have tended to appear near major price peaks.

Will history repeat once again — or is this rally still unfolding? Elliott wave analysis helps place these extremes into a broader market context and assess what typically comes next when conditions look like this.

Elliott Wave International has identified 18 charts that are flashing “warning” signals – check out their free report to prepare for what’s next..