top of page



When war breaks out, financial commentators often ask, "What does the war mean for the trend of the stock market?" But no one asks ahead of time, "What does the trend of the stock market mean for the prospects of war?" No one, that is, aside from the analysts at Elliott Wave International, who have used trends in Russia's stock market to predict the country's invasions of Georgia in 2008, Crimea in 2014 and now Ukraine in 2022.

Excerpts of the firm's analysis leading up to Russia's most recent invasion can be found on the company's website.

Russia's three invasions over the past 15 years occurred during significant declines in the country's primary stock market index.

Analysts at EWI use Robert Prechter's socionomic theory, which proposes that stock market indexes are excellent indicators of society's mood. A rising stock market reflects a more positive mood, and a falling stock market reflects a more negative social mood.

"When society is in a positive mood, people send stock prices higher and prefer peace over war. When society is in a negative mood, people send stock prices lower and prefer war over peace," explained Murray Gunn, the firm's head of global research.

Unlike stock markets in the U.S., which have mostly gone higher over the past 15 years, Russia's primary stock index, the RTSI, has gone mostly lower over that time and still trades below its 2008 high. That long-term bear market in Russian stocks has coincided with a resurgence in the country's military aggression.

In late 2007, with Russia's stock market up 5,000% from its 1998 low, Elliott Wave International issued a report that forecasted a major top in the RTSI and an end to Russia's amiable international relations. It pinpointed the countries Georgia and Ukraine among the most likely locales for conflict.

Six months later, the RTSI started a plunge that erased more than 50% of its value. About a third of the way into that steep drop, Russia invaded Georgia.

Fast-forward to December 2013. The RTSI was headed sharply lower again as unrest rocked Ukraine. An Elliott Wave International analyst wrote that Russia was "particularly unlikely to tolerate much more instability before intervening." Russia intervened just two months later, invading Ukraine and annexing Crimea.

Fast-forward once more to February 4, 2022. The RTSI had plummeted from its October 2021 high, and Russia had gathered troops on its border with Ukraine. Vladimir Putin claimed he had no plan to invade. But Gunn told EWI's subscribers that with the decisive move down in the RTSI, "we take those statements with a bucket-full of salt," concluding "another incursion appears likely."

And invade Russia did.

Regarding the prospects for future conflict, Gunn explained, "No matter what Russia does over the near-term, the RTSI's long-term pattern suggests that Russian aggression is extreme. Until we see a change in the bear market pattern, conflict risk will persist."

More of EWI's latest commentary on Russia is in the monthly publication, Global Market Perspective.

About Elliott Wave International

For over 40 years, our subscribers have trusted us to guide them through economic, financial and social uncertainty. Elliott Wave International is the world’s largest independent financial and social forecasting firm. Find out more:


bottom of page