Monday, October 21, 2013

Major Turning in Progress, Bumpy Road Ahead: Outlook 21 Oct. '13

after market update: actual S&P +0.16 (+0.01%); Market does indeed appear to be undergoing a turning point, as the entire day showed uncertain action near the unchanged line.  A directional move did not occur as this turning process is still in progress.



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Overview: Social mood shows an almost desperate, last gasp, surge of aggression or optimism.  Today's news is likely to be considered somewhat negative.  Markets are at a major turning point.  Will they turn down from here, or begin a new range upward?

Today's Market Outlook is Uncertain, Directional (-0.1% to +1.2%).  A strong directional move is expected today.  Whether it will be up or down is unclear due to a trend change in progress.  Social mood is desperately trying to push ahead, the news (or global reality) is dragging it down.
 
Near term mood outlook: The social mood pattern corresponds with a desperate striving toward optimism in the face of bad news.  The combined pattern, at times, accompanies global themes of violence, instability, and geopolitical escalation.
 
Near term market outlook: Social mood is at resistance; markets are at a turning point.  If mood and markets do not turn down immediately, a strong positive surge into a new range could be at hand.
 
Longer term outlook: The overall social mood trend is down.  When the current bounce is over, markets should be turning down and joining mood in a period of decline. 
 
Today’s social mood signal is +12.1 S&P points (+20.7 S&P points for the entire weekend signal, Saturday through Monday).  Markets tend to follow social mood more often than not. 

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Today’s news signal is -2.6 S&P points (-1.9 S&P points for the entire weekend signal, Saturday through Monday).  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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Note: data for U.S. social mood are scores in eight MoodCompass categories of Google Hot Trends, data for news are scores of top Google U.S. news stories.  Scores are converted to 4 inputs to the Market Mood Model.  The output is a conversion of mood data to estimated S&P point change. 

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