DOW JONES enters decade long volatility when inflation happens

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This is a long-term macro-economic chart on the 1M (monthly) time-frame, displaying Dow Jones (top chart) and the U.S. inflation rate (bottom chart). An interesting, yet alarming, correlation can be found on a decade-long horizon by comparing those two.

As you see, the three previous times that the inflation rate made a Higher Highs pattern, Dow entered a +10 year consolidation phase of very high volatility where at least once, the 1M MA200 (orange trend-line) was touched. Interestingly enough, those decades coincided with the biggest wars after WW1. If this is indeed a pattern to follow, could this mean that the new volatile decade ahead will be marked by yet another big war (the Russia - Ukraine perhaps)? Will the 1M MA200 be hit again before 2030? History certainly seems to agree.



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