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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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.