Civil Unrest Risk Rising: Outlook 26 November '13

after market update: actual S&P +0.27 (+0.01%);  Markets spent most of the sessions steadily struggling to continue upward.  With only a few minutes left in the session, markets dropped sharply, losing all gains for the day.  Tomorrow could be an interesting day, as all of this pent up energy gets released.
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Overview: Social mood is reflecting uncertainty, aggression, and willingness to take action.  The risk of protests and civil unrest is increasing.  Themes in the news are reflecting a perception of deterioration, destruction, and/or disaster.  Markets are likely to range from nearly unchanged to sharply down.  Watch for a possible negative news headline to shake things up.

Today's Market Outlook is nearly unchanged to sharply down (0% to -2.3%).  Both the social mood signal and the signal from themes in the news are slightly down.  However, the signals over the last few days show a sharp downturn may be imminent.  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 uncertainty, aggression, and willingness to take action. The risk of protests and civil unrest is increasing, along with the possibility of terrorist activity.  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 a 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 that 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 -2.7 S&P points as of the time of this posting.  On a daily basis, markets tend to follow social mood more often than not. 

 

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Today’s news signal is -0.6 S&P points as of the time of this posting.  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.