Fraying at the Edges: Outlook 23 Sept. '13

after market update: actual S&P -8.03 (-0.5%); Markets opened nearly unchanged, then dropped down about 0.6%, only to spend the rest of the session moving sideways.  Uncertainty over the looming budget  deadline and ever more likely government shutdown are named as primary causes. 
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Overview:  Things are looking less bright, as the collective mood portrays a strong push in two or three competing directions. The social mood pattern is also associated with aggressiveness.  Violence and other news themes showing rising instability have continued over the weekend; the mood continues to show an elevated risk of volatility.  Markets could be choppy as the new downward trend takes hold.

Today's Market Outlook is Down to Unchanged (-0.7% to +0.0%).  A sharp stock market drop may be in progress.  Social mood has been sharply down since last week.  The markets should be joining the trend momentarily.  At the time of this posting, the social mood signal is negative.  The news signal is neutral to negative.

 

Near term outlook: The social mood pattern corresponds with aggressiveness, and pushing in a specific direction (or two or three specific directions).  Common news themes associated with the current news mood pattern are uncertainty, confusion, and volatility.  The combined pattern, at times, accompanies global themes of violence, instability, terrorist activity, and geopolitical escalation.  Diplomatic endeavors or negotiations are not likely to succeed at this time, as a mood of genuine cooperation is almost non-existent.

 

Longer term outlook: The social mood trend has turned sharply down; the bounce over the last month appears to be complete.  However, confirmation of a continuation of the long term downtrend has not yet occurred.

 

Today’s social mood signal is -7.7 S&P points (entire weekend signal Saturday through Monday is +3.4).  Markets tend to follow social mood more often than not.

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Today’s news signal is +0.3 S&P points (entire weekend signal Saturday through Monday is -12.8).  News tends to follow the general trend of the market, but on a daily basis, can either lead or lag the movement of the market.    
 

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