Terrorism / Disaster signature continues: Outlook 31 Oct. '13

after market update: actual S&P -6.8 (-0.4%); Markets were down and choppy today as social mood hovered above a short term support.  The "disaster or terrorist activity" should be in the next day or two, if such an event is going to take place in connection with the current mood pattern.

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Overview: Social mood has dropped hard and fast over the last couple of days.  Fortunately, it is near a support area, so whatever happens, it won't be a "straight down" type event.  Social mood reflects aggression and "righteous agendas."  The themes in the news are associated with the perception of destruction, deterioration, or disaster; also, government intervention may be possible.  Markets should be right behind the social mood drop.  Whether it happens today, or in a few days, something abrupt and tragic is very near.

Today's Market Outlook is down, choppy (-0.1% to -0.65%);  While the news signal is near unchanged at the time of this posting, the social mood signal is moderately down.

 

Near term mood outlook: The social mood pattern corresponds with aggression and "righteous agendas."  The mood themes found in the news are associated with destruction, deterioration, or disaster.  The combined pattern of news and social mood, at times, accompanies global themes of violence, protests, and terrorist activity.  An abrupt change and something of a tragic nature is indicated as a highly likely occurrence within the next few days.

 

Near term market outlook: The social mood signal has turned down from the resistance area (see this post for more info).  Markets should momentarily turn down sharply.

 

Longer term outlook: The overall social mood trend has been in what appears to be a topping process all year.  There are no clear signals that this process will be over anytime soon.  Yet, a sharp drop of more than 10%, likely before year's end, is indicated by long term mood and market charts.

 

Today’s social mood signal is -10.5 S&P points as of the time of this posting.  Markets tend to follow social mood more often than not. 

 

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Today’s news signal is -1.4 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.    

 

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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.