Socionomist and market analyst spoke at 5th Annual Social Mood Conference
Brian Whitmer is no stranger to seeing big changes before virtually everyone else. In December, he forecast that the Swiss National Bank would remove the Swiss franc’s peg to the euro. The following month, the SNB shocked the rest of the world when it did exactly that.
Brian joined a roster of diverse speakers at the 2015 Social Mood Conference. Before the conference, he sat down with us to discuss his interests in market analysis, European trends and the upcoming event.
You can click the play button to watch the conversation, or read a transcript below.
Socionomics Foundation: Brian, prior to joining Elliott Wave International, you worked as a civil engineer. Can you tell me a bit about your background and how you ended up becoming a market forecaster?
Brian Whitmer: I spent the first part of my career in civil engineering, and I mainly designed residential and commercial developments. We would come into an empty tract of land. We would do the initial surveys. We would design all the roads, the water systems and the storm drainage—mainly all of the infrastructure that’s needed to build homes, offices or retail stores. From about 2003 until 2007, I worked almost exclusively for one client. They were developing a luxury golf course community in South Carolina. It was a huge project: 5,000 acres, 9,000 homes. It was a beautiful project. But this, of course, was during the heyday of the housing bubble, and what I distinctly remember is that money suddenly became no object. Usually as engineers, we’re constantly trying to find cost-effective solutions to engineering problems. In this case, time suddenly became our main motivator. Our client would gladly pay for anything we needed. The goal was about how fast can we get these sub-projects designed, how soon can we get the plan submitted, and how fast can we get our permits and start building homes. So I really had this front-row seat to this incredible mania in real estate. And around the same time, I had discovered Bob Prechter’s work, not just in socionomics but in crowd psychology generally. I was trading my own equity accounts at the time as a hobby, and I quickly realized that I wanted to spend much more time researching and forecasting markets than I wanted to spend designing housing subdivisions. I made a career change in 2009, and it turned out to be great timing for me. I found out later that our clients fell on hard times like everyone else. That particular community has been sold and re-purchased many times over the past six years.
SF: At Elliott Wave International, you write the monthly European Financial Forecast and contribute to the European stocks section of EWI’s Global Market Perspective. How do you incorporate social mood into your monthly analysis of the various European markets?
Brian Whitmer: I’m constantly searching for surveys, opinion polls or other analyses that help me to gauge optimism and pessimism. When I find one, I immediately plot it next to a chart of stocks, and I see if it has provided useful trading signals in the past. Many times, you get mixed signals. A certain survey may be showing an optimistic extreme, but you find pessimism or neutral readings elsewhere. So I like to develop sort of an arsenal of sentiment gauges, as many as I can find, both for near-term forecasting and for longer-term trends. Then, I compare those sentiment gauges with what I’m seeing in terms of Elliott wave patterns, and I use them to confirm or deny what the wave pattern is telling me.
SF: And looking at Europe from a ‘big picture’ perspective, how do you think the social mood trend will affect the European landscape down the road?
Brian Whitmer: That’s exactly what I’m going to talk about at the conference. I’ve found that the Euro Stoxx 50 Index is the best overall gauge of social mood in Europe. It’s basically the Dow Jones of Europe. It has stocks like BMW, Daimler and Siemens. And it’s trended toward the negative side since 2000. Stocks are down some 40% from their highs in 2000, and that trend has dramatically impacted Europe in lots of interesting ways. I’m going to focus my talk on two areas. For one, I want to discuss how negative mood has re-shaped the European economy. Specifically, Europe is seeing some weakness that that rivals, or in some cases exceeds, the weakness we saw during the Great Depression. That’s the first part of my talk. Secondly, I want to talk about the European Parliament. What we’ve seen there is that political parties that are against the European Union or against the euro have gained a lot of ground over the two largest coalitions, which sort of represent the status quo. And this is a big, big change since 1999. It’s exactly what socionomics says to expect during a negative social mood trend. And I think it’s important now because I think we’re somewhere in the middle of this trend and not near the end.
SF: This is your first time speaking at the Social Mood Conference, but you’ve actually attended the event many times in the past. Can you give a preview of what attendees can expect from the day?
Brian Whitmer: They can expect to have fun, first and foremost. The thing I like about the conference is that it’s not stuffy at all. I speak at a lot of economics seminars in Europe, and they tend to attract the stereotypical economist or financial types—very businesslike, very serious. Socionomics is different. It attracts an eclectic group of people. It’s a relaxed atmosphere. It’s usually very interesting and fun. It’s a great way to network with other likeminded people from around the globe. So in addition to very unique ideas and very forward-looking analysis, I think that everyone should just expect to have a lot of fun, too.
SF: Thanks, Brian.