Technical Analysis goes full throttle Mood and the quest for speed

A couple of weeks ago we wrote about the book edited by Robert Prechter, Socionomic Studies of Society and Culture.  We return to it this week because Chapter 34 was reprinted with permission from Murray Gunn, an article he had written in June 2015 when he was HSBC bank’s Macro technical analyst.  Some of you will recognise him from appearances at STA monthly meetings, other events, and work he has done for the society.

Now, the STA is a broad church attracting all sorts and for different reasons, something which is refreshing and helps us see things from A N Other’s perspective.  I for one though, was unaware that petrol heads and grease monkeys are part of the troupe.  Entitled: Beyond the Redline – A Socionomic Relationship Between Motorcycle Speed and Markets – I practically fell off my little perch.

Reminding us that ‘Socionomics turns orthodox thinking on its head…[where] thinking that recessions make business people cautious, a socionomist would contend that it is cautious business people who make recessions’; Gunn also claims that ‘positive social mood prompts people to feel the need for speed’.  The chart attached plots the Dow Jones Industrial Average from 1890 overlaid with a stepped, ascending line of the top speed of the fastest production motorcycle at the time.

He then takes us briefly through the history of the bikes, their brake horse power, and miles per hour.  With the sort of detail worthy of an anorak or train spotter, I learnt that the first production motorcycle was the 1894 Munich-built Hildebrand & Wolfmüller Motorrad.

Production and development shifted to Japan in the 1950’s and 1960’s as the country went full tilt at post-war reconstruction – a very bullish phase.  The Italians dominated the classy end of the spectrum in the 1970’s (think Ducati) and the race for faster, more powerful machines heated up.  At the time of writing the biggest beast was the Kawasaki Ninja H2R version, not for street but just track use, which had a break horse power of between 200 and 300 and a top speed of over 200 miles per hour.  Test rider Adam Child wrote after a spin on this brute: ‘That was epic; pure and brilliant insanity’.  You add the exclamation marks and picture the parabolic curve when plotting speeds over time.

Murray Gunn is a former board member and active member of the Society and founder of TrendWave Trading

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The views and opinions expressed on the STA’s blog do not necessarily represent those of the Society of Technical Analysts (the “STA”), or of any officer, director or member of the STA.

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About Nicole Elliott

Nicole Elliott

A graduate of the London School of Economics and Political Science (BSc Social Psychology) Nicole Elliott has worked in banks in the City of London for the last 30 years. Whether in sales, trading or forecasting technical analysis has always been the bedrock of her thinking. Key expertise lies within all areas of treasury: foreign exchange, money markets, fixed income and commodities.

She has also added to the body of knowledge of the industry writing the first western book on Ichimoku Cloud Charts. Strong media links and a cult following are due to her prescient calls on the markets and often entertaining format.

Nicole can be contacted at trending@sta-uk.org

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