Big Day? - Outlook 13 December '13

after market update: actual S&P -0.2 (-0.01%); Markets were nearly unchanged all day.  The big divergence between social mood and markets show that a climax is near.  We will have to wait until early next week to see how social mood and markets resolve this divergence.

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Overview: The social mood pattern for today reflects aggression and rising emotions.  Themes in the news reflect destruction, deterioration, or disaster, with a possible connection with government or government intervention.  Markets could be sharply down today.  There is still a U.S. disaster/tragic event watch for another day or two (see Next American Tragedy).

Today's Market Outlook is nearly unchanged to sharply down (0% to -0.8%).  The social mood signal is sharply down, and the signal from themes in the news is near unchanged.  A climax may be near.  The projected stock market change for today is shown in the chart below.

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Near term mood outlook:  aggression and rising emotions.  Themes in the news reflect destruction, deterioration, or disaster, with a possible connection with government or government intervention.  The combined pattern of news and social mood reflects an elevated global risk of violence, protests, and an elevated risk of geopolitical escalation; there are rising economic concerns in the background.  

 

Near term market outlook: The social mood signal is indicating 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.  This topping process appears to be in its final stages.  A sharp market drop of more than 15% indicated by long term mood and market charts, may be in its early stages.

 

Today’s social mood signal is -14.2 S&P points as of the time of this posting.  On a daily basis, markets tend to follow social mood more often than not.  Overall, social mood trend changes often precede market trend changes.

 

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Today’s news signal is -0.3 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.