|This essay by Mark Galasiewski originally appeared in
The Elliott Wave Theorist in January 2007
The Elliott Wave Theorist’s 1985 essay, “Popular Culture and the Stock Market,” identified horror films as manifestations of negative mood trends, so they tend to be most popular during bear markets in stocks. Anecdotal evidence suggested that other genres rise and fall with the social mood, but until now no data was available that could capture the quantity, quality and popularity of various movie themes. Filmsite.org has generated lists of the “greatest” English-language films in each genre, including the negatively themed styles of Horror, Crime/Gangster, Disaster and “Noir” (classic film noir and its modern “post- (or neo-) noir” and “technoir” derivatives). The site acknowledges that any list of “greatest” films is inherently subjective but asserts that the critics made their selections consistently. As data are hard to come by, we take what we can get.
The chart of the four genres in Figure 2 shows that, in the aggregate, highly regarded negative mood-themed films tend to peak in significant bear market years and trough near significant stock market tops. It is quite striking that the lowest readings on the chart occur in 1926, 1929, 1966, and 2005; the first three of these years saw stock market peaks of Primary, Supercycle, and Cycle degree, and in the fourth the Dow was approaching its all-time high in Cycle wave b.
The years around 1932, the bottom of the 1929-1932 crash, saw the release of not only such seminal horror films as Dracula (1931), Frankenstein (1931), Dr. Jekyll and Mr. Hyde (1932), The Mummy (1932), The Invisible Man (1933), and King Kong (1933), but also envelope-pushing Crime/Gangster films such as Public Enemy(1931), I Am a Fugitive From A Chain Gang (1932), and Scarface: The Shame of the Nation (1932), which the website describes as “one of the boldest, most potent, raw and violently brutal gangster-crime films ever made.”
As the 1929-1949 (inflation-adjusted) correction wore on, film noir replaced horror as the crowd favorite. Filmsite.org says that the genre is characterized by themes of “fear, mistrust, bleakness, loss of innocence, despair and paranoia”—clearly bear-market fare. The mid-to-late 1940s produced the famous noir films (some also categorized as Crime/Gangster) Double Indemnity (1944), The Big Sleep (1946), Notorious (1946), The Postman Always Rings Twice (1946), Out of the Past (1947), The Third Man (1949), and Sunset Boulevard(1950). After 1945, the popularity or quality of negative mood films receded until 1966, the orthodox top of wave III.
As Cycle wave IV began and the DJIA headed downward, interest in bear-market films began to revive. The late 1960s saw the release of such titles as Bonnie and Clyde (1967), Cool Hand Luke (1967), In the Heat of the Night (1967), and Night of the Living Dead (1968). The four bear-market genres reached a peak in the years around 1973, in the middle of the 1966-1982 correction. The Exorcist (1973), which remains one of the few Horror films ever nominated for Best Picture, and Jaws (1975) were among the first blockbuster fright films. The Godfather (1972), Serpico (1973), Badlands (1973), The Godfather, Part II (1974), Death Wish (1974), and theDirty Harry “series” (1971-76) were popular Crime/Gangster films of the period. “Post (or Neo)-Noir” films included Chinatown (1974) and The Conversation (1974). The Disaster films Poseidon Adventure (1972), The Towering Inferno (1974), Earthquake (1974), and The Hindenburg (1975) satisfied the public’s need to witness vicariously misfortune on a massive scale. Thereafter, negative mood films began to recede in popularity as the bull market of the 1980s took off. The lowest reading of the decade occurred in 1989, the year the Berlin Wall came down and the Soviet Union pulled out of Afghanistan. Negative mood themes at the box office did a good job of expressing the decline in social mood during the 1987-1994 corrective period (see Figure 1). The year of the initial crash (1987) produced an explosion in fright films, including Hellraiser, Dead of Winter, The Lost Boys, and Fatal Attraction.
The correction that produced the 1990-1991 recession and the Gulf War brought Arachnophobia (1990), Jacob’s Ladder (1990), and Misery (1990). These were followed over the next several years by Silence of the Lambs(1991), Bram Stoker’s Dracula (1992), Interview with the Vampire (1994), and Seven (1995). Crime/Gangster films of the period included (after a 16-year hiatus for the series) The Godfather, Part III (1990), Goodfellas(1990), Reservoir Dogs (1992), A Bronx Tale (1993), Carlito’s Way (1993), Natural Born Killers (1994), and Pulp Fiction (1994). Neo-noir examples during the period include Basic Instinct (1992) Devil in A Blue Dress (1994), and Fargo (1996). An anomaly is the large number of Disaster releases that Filmsite.org rated highly in 1997 (such as Dante’s Peak, Volcano, Titanic, Air Force One, Con Air, The Jackal, and Speed 2:Cruise Control), when the stock market mania was well under way. We would argue, however, that the last four films in that list should be categorized as Action/Adventure films, and Titanic as a Romance, which are staples of bull markets.
Again, the subjectivity of those data can be a source of error. Negative-mood-themed films—especially horror—have soared in popularity since the bear market began in 2000. But Filmsite’s data series includes only those that are highly regarded. Assessments of today’s torture films may rise in future years, but we are confident that we will see higher acclaim for Hollywood’s fear factories as the negative mood trend intensifies once the Dow turns down in wave c.■
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