Nearing the Top-- It's all downhill from here: Outlook 12 Nov. '13

after market update: actual S&P -4.2 (-0.24%) ; The market struggled for direction today.  The next day or two should complete the current trend/paradigm shift. 

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Overview: Social mood is reflecting tired optimism, and a new paradigm on the horizon.  The themes in the news reflect destruction, deterioration, or disaster as well as government and government intervention.  Based on current mood signals, markets could struggle to try to stay positive today.  The next day or two are key to overall market direction.

Today's Market Outlook is unchanged to up (0% to +0.2%);  both the social mood signal and the signal from themes in the news are positive, but barely so. Mood signal momentum indicates a trend change is near.  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 tired optimism, and a new paradigm on the horizon.  The themes in the news reflect destruction, deterioration, or disaster as well as government and government intervention.  The combined pattern of news and social mood reflects a rising global background of fatigue and anxiety.  

 

Near term market outlook: The social mood signal is still quite near the high of September 14, but may be turning down at this resistance area.  Markets may also be hitting a ceiling here.  The markets had broken below the key 1760-1780 area and are testing it once again.  The mood signal still needs to confirm this downward trend change with a break of this area.  However, the mood signal is now testing the upper end (resistance) to either fall back from this ceiling or push for a possible upside breakout.  The next day or two are key to overall direction.

 

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 market 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 +1.0 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 +2.7 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.