Increasing Destructiveness: Outlook 22 November '13

after market update: actual S&P +8.9 (+0.5%); In spite of the degradation in social mood, and the increase in destructive sentiment, today's market continued to climb.  Will the growing differential be resolved with a big boost of collective optimism, or a sharp drop in the stock market?

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Overview: Social mood is reflecting a move toward revolutionary and anti-establishment outlook and behavior.  This would favor an increase in protests, civil unrest, and possibly terrorist activity in the next week or so.  Themes in the news are reflecting an increasingly somber tone, deterioration, destruction, and/or disaster.  Markets are likely to be down today, possibly sharply down.

Today's Market Outlook is slightly down to sharply down (-0.2% to -1.6%);  both the social mood signal and the signal from themes in the news are negative.  The social mood signal is at support.  Any further deterioration could spell social upheaval and serious economic fallout.  The projected stock market change for today is shown in the chart below.

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Near term mood outlook: reflecting a move toward revolutionary and anti-establishment outlook and behavior.  This would favor an increase in protests, civil unrest, and possibly terrorist activity in the next week or so.  Themes in the news are reflecting an increasingly somber tone, deterioration, destruction, and/or disaster.  The combined pattern of news and social mood reflects a global perception of rising uncertainty and economic concerns.  

 

Near term market outlook: The social mood signal has broken first support (1780) which puts mood (and market) in a near term downturn.  Longer term trend is expected to be generally up as long as the mood signal does not go below current levels (1760 primary support).  Social mood signal momentum is indicating that a trend change is approaching.

 

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  -13.9 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 -2.8 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.