Aggressive Destruction: Outlook 25 November '13

after market update: actual S&P -2.3 (-0.1%); Markets moved sideways, slightly above the zero line, broke below, and ended only slightly down.  This shows the strong pull in both directions in effect right now.

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Overview: Social mood is reflecting aggression, and willingness to take action.  Themes in the news are reflecting a perception of deterioration, destruction, and/or disaster.  Markets are about as likely to be up as down today, with strong forces pushing in both directions.  Watch for a possible negative news headline to shake things up.

Today's Market Outlook is sharply up to sharply down (+1.2% to -1.0%).  There is extreme divergence between social mood and the news signals.  Social mood is strongly signaling a down, but has just completed a polarity flip, making it ambiguous.  The signal from themes in the news is showing a sharp deterioration.  Markets may make strong moves in both directions, or have trouble moving at all.  The projected stock market change for today is shown in the chart below.

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Near term mood outlook: Social mood is reflecting aggression, and willingness to take action.  Themes in the news are reflecting a perception of deterioration, destruction, and/or disaster  The combined pattern of news and social mood reflects a global perception of aggression, willingness to take action for a purpose, and possible increase in violence.  

 

Near term market outlook: The social mood signal has broken below primary support (1760) which signals a serious downturn in social mood which is likely to be followed by the markets.  

 

Longer term outlook: The overall social mood trend has been in what appears to be a topping process for many months.  There are no clear signals that this process will be over anytime soon.  Yet, a sharp market drop of more than 15%, likely within the next few months, is indicated by long term mood and market charts.

 

Today’s social mood signal is -22.0 S&P points as of the time of this posting -19.0 for the entire weekend, Saturday through Monday).  On a daily basis, markets tend to follow social mood more often than not. 

 

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Today’s news signal is -9.0 S&P points as of the time of this posting (-18.7 S&P points for the entire weekend, 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.  Stock market data source: Google Finance.  This is posted as a public service, and to enhance exposure to our research.  It is not intended to be trading advice.