Sharp Deterioration of Social Mood: Outlook 19 Sept '13

after market update: actual S&P -3.2 (-0.2%); The sharp drop in mood did not yet translate into a sharp market drop as the trend change takes hold and people collectively struggle with assessing a new reality.

news stories that fit today's themes: 13 Wounded as Gunmen Open Fire in Chicago Park
- - -

Overview:  A sharp stock market drop is likely in the next few days.  Social mood is sharply down, and the markets are within a day or two of joining the trend.  In the early stages of a trend change there is often confusion and hesitation as forces pull in both directions, and people try to make sense of the changes they are perceiving. Estimated losses for today as high as 1-2%.

Today's Market Outlook is Sharply Down.  The social mood signal is strongly negative.  At the time of this posting, the news signal is slightly positive.  News signal momentum indicates a trend change is near. 

 

Near term outlook: The social mood pattern corresponds with perceptions of destruction, deterioration, and violence or volatility.  Common news themes associated with the current pattern are confusion, and violence or volatility.  The combined pattern at times accompanies violence, instability, terrorist activity, and geopolitical escalation.  Diplomatic endeavors or negotiations are not likely to succeed at this time, as a genuine mood of 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. 

 

Today’s social mood signal is -18.2 S&P points.  Markets tend to follow social mood more often than not.

 (click to enlarge)

Today’s news signal is +4.0 S&P points.  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.    
 

(click to enlarge)