Is A New Revolution In France Just Beginning?

The French are partial to a revolution.

The French Revolution, beginning in 1789, accelerated the rise of republics and democracies around the world. The motto most closely associated with the French Revolution is “Liberté, égalité, fraternité” – Liberty, equality, fraternity. However, the original motto included one more noun: “ou la mort” – or death.

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french revolution

Iranian Revolution in Shahyad Square.jpg
By Aristotle Saris - AP Photo, Public Domain, Link

Sadly, that original motto might be appropriate in Paris this weekend. More than 130 people were injured and 412 arrested in Paris last weekend as protests, originally against a fuel tax, grew into a general riot against the elite. The Champs-Elysees Avenue and its surrounding posh neighborhoods became a battleground with cars being set alight and shops looted. According to a Bloomberg article, “The protests initiated by the grassroots Yellow Vests movement against a fuel-tax hike have morphed into something a lot more intense with other sections of the population -- students, farmers, truck drivers and any old angry person -- all joining in.” Indeed, people are so angry that some fear extreme violence could erupt. As one taxi driver put it, “We’re going out there to fight...I have nothing to lose. You have to risk your life or you don’t get anything from these people.”

Why are the protests and riots erupting now? History shows that negative social mood trends, as reflected by declining stock markets, inspire social unrest, hostility and even revolution. And France’s social mood, as measured by its stock market, has been trending negatively for 18 years. The CAC Quarante topped out in September 2000 and has not regained that peak since. Furthermore, we’ve identified a common pattern in technical analysis, a triangle, in the index. (See the red lines on our chart.) The most salient feature of this pattern for investors today is its immediate message - the final leg of the triangle is getting underway now. The final waves of triangles tend to be the most intense. Very often, the final leg ends with an “event” symptomatic of the previous trend. In this case, that trend would be an 18-year+ negative social mood trend.

Symptoms of this long-term negative trend in social mood are manifesting in France. If our analysis is correct, a new revolution may be only just beginning.




About the Author

Murray Gunn
Murray Gunn is Head of Research for Elliott Wave International's Global Market Perspective, a monthly summary of the firm’s 25 analysts’ views on every major freely-traded market in the world. After earning his Master of Arts (Honors) degree in Economics from the University of Dundee in Scotland in 1991, Gunn went into fund management. He quickly realized that textbook descriptions don’t apply to real-world markets, which in turn led him to technical analysis and the Elliott Wave Principle. He worked as a fund manager in global bonds, currencies and stocks, including long posts at Standard Life Investments and a five-year stint in the Middle East at the Abu Dhabi Investment Authority. Gunn then joined HSBC as Head of Technical Analysis. He has served on the board of the Society of Technical Analysts and delivered lectures on the Elliott Wave Principle to students at The London School of Economics, Queen Mary University and Kings College London. You can read Gunn's commentary in Elliott Wave International’s Global Market Perspective, Interest Rates and Currency Pro Services, and on deflation.com.