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The assault on soda pop is definitely on the move as this story is just one of several that indicate public officials are moving in to control consumption of soft drinks. In India, for instance, a quarter of the countries 28 states have announced partial or total bans of Coca-Cola and Pepsi due to concerns about pesticides. The ban is based on a report that was first completed in 2003. The study was attacked as inaccurate, but after three years of inaction, a similar study is out and it is sparking action. Subscriber’s understand the timing as it is completely coincident with the Dow’s initial bear market low, countertrend rally and renewed descent. 

Elliott Wave International has maintained a running commentary on the turn against the most popular drinks of the bull market, particularly Coca-Cola, which is the original bull market beverage. For the discussion in the latest issue of The Elliott Wave Financial Forecast see Additional References below and further commentary in Sociotimes entry of June 29. As noted in the latest issue, one sure confirmation of a reversal is energy drink makers decision to spike their drinks with alcohol. So, it comes as no surprise that a Coca-Cola bottler in Austsralia “has developed a thirst for beer.” In “Coke Gets A Bit Tipsy,” the Australia Herald Sun reports that the bottling giant has is also moving into the alcohol market. The announcement was accompanied by word of an “unexpectedly large fall in profit.” It said to be a “natural step” given its distribution pipelines, but the decision to exploit the connection is a sure sign of tidal shift from a collective need for a pick-me-up to something with the depressing effects of alcohol.

EWFF, August 2006
I Get A Kick from Ultra Jolt
Back in 2001, The Elliott Wave Financial Forecast offered a two-pronged forecast for coffee prices, saying that the price of coffee beans was heading higher, while the biggest chain of retail java shops, Starbucks, was headed much lower. We were right about coffee, which more than tripled, but very wrong about Starbucks. Still, the historic link between the popularity of coffee houses and big bull markets (discussed in November 2001 EWFF) remains in place, as Starbucks accompanied the Value Line Arithmetic index and several global indexes to substantial new all-time highs. It has also turned down from a May 5 peak in a form that is consistent with a long term peak.

As EWT noted with respect to Microsoft near its all-time high in late 1999, major peaks are followed by societal attacks against the most successful corporate beneficiaries of a bull market in social mood. So it is now with the world’s biggest coffee chain. Starbucks is “in the sights of the so-called ‘food police.’ The Center for Science in the Public Interest plans to take action against the popular coffee chain” for the high-fat products it sells. Energy drinks are another bull market beverage that is suddenly under fire. “Energy Drinks Are Fueling Concern,” says the June 19 issue of The New York Times. Energy drinks complemented the bull market peak perfectly. They first hit the market at the 1987 high, when Jolt Cola and Red Bull were introduced. At the end of the greatest top-building process in stock market history, drinks with even more bullish sounding names— such as Extreme Energy Shot, EndoRush and Ultra-Jolt—and four times the caffeine of a traditional bull market beverage, Coca-Cola (see December 1999 issue of EWFF), comprise the fastest growing segment of the beverage industry.

Now, check out the latest twist, which literally cans the cross-currents of an expiring bull and a revitalized bear:
Energy Drinks Add Another Kick–Alcohol Energy
—The Atlanta Journal-Constitution, June 11, 2006

It picks you up and slows you down at the same time, the perfect cocktail for celebrating the all-time peak in the Value Line and the initiation of a third wave decline in the S&P. In a collective toast to the greatest top of all time, people everywhere are knocking back Tilt, Sparks and Liquid Charge. How long can it be before we hear: “Bartender, give me an energy drink, but hold the energy?” Not long, we bet.