Outlook 18 December '13

after market update: actual S&P +29.7 (+1.7%). Social mood wanted the market to go up, and up it went today.  Tomorrow is the last day for the U.S. disaster/tragedy watch.  Hopefully, it will pass without incident.  With the markets so seriously overbought relative to social mood, tomorrow could be interesting regardless.

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Overview: The social mood pattern for today reflects aggression and a desire for direction.  Themes in the news reflect destruction, deterioration, or disaster, with a possible link to government or government intervention.  Markets are likely to be up.  There is still a U.S. disaster/tragic event watch for one more day (see More Info on Next U.S. Tragedy) as we ensure that the Arapahoe shooting,  the Reno hospital shooting, and the Alabama apartment explosion were intense enough to resolve the social mood pattern.

Today's Market Outlook is moderately up (+0.4%).  Both the social mood signal and the signal from themes in the news are up.  The projected stock market change for today is shown in the chart below.

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Near term mood outlook:  aggression and a desire for direction.  Themes in the news reflect destruction, deterioration, or disaster, with a possible link to government or government intervention.  The combined pattern of news and social mood reflects aggression, a desire for leadership and direction, and an elevated risk of geopolitical escalation.  

 

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 +7.0 S&P points as of the time of this posting.  On a daily basis, markets tend to follow social mood more often than not.  Overall, social mood trend changes often precede market trend changes.

 

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Today’s news signal is +6.7 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.  This is posted as a public service, and to enhance exposure to our research.  It is not intended to be trading advice.