Tuesday, March 18, 2014

The Next Crisis Wave Approaching?

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Back on 24 February, we posted our observation that globally, the risk for violence and war was on the rise.  It seemed somewhat preposterous, as the news was all about diplomacy and cooperation (Iran negotiations, Syria destroying weapons, etc.).  Yet, that is what the patterns in social mood were displaying.

On 28 February, we posted World in Crisis, U.S. government and people not immune.  Hours later, the Ukraine crisis was in the news.  There were indications in our data of an approaching major disaster in scale, but little to no U.S. casualties were projected as likely accompanying this.  For that reason, we called it a crisis, not a disaster.  Also, from the social mood pattern, we determined the type of crisis projected is type NE.  From the post: "The most likely types of events that show up with type NE are an economic disaster, an attack from another geopolitical entity, or if a natural disaster, a winter storm.  It’s also associated with anxiety and risk aversion."

By 5 March, we noticed that the charts were showing that this crisis had still not had a substantial U.S. impact, and did not get the telltale "disaster pressure" relief indicated by orange lines on the chart above.  We posted the date information of 6-13 March as the likely time-frame for this.  During the period of 7-14 March, markets were down in what may be the initial warnings of a much larger decline.  The relief of "disaster pressure" has shown up in the charts, yet the crisis is not over, nor has it yet had a substantial U.S. impact.  During the time period under watch, background disaster-type events were showing up, yet they were not of major U.S. impact: a Malaysian airliner disappeared over the ocean, a U.S. building exploded from a gas leak, several people were killed when someone crashed their car into a stage, and earthquakes in Northern and Southern California not causing much damage, but causing concern and making headlines nevertheless.  The scale of all of these events appear to be "disaster precursors."  They show up near major disasters or crises, but aren't the main event.  For this reason, we have colored the area of 7-14 March yellow on the chart.

If there are much larger U.S. impacts still developing in this very complex pattern, we would expect the line on the chart to turn up over the next few days, and to remain above the horizontal black line at the right side of the chart.  Things would tend to get really bad as the curve reached its top again, likely in another week or two.  Stay tuned.

Thursday, March 6, 2014

War, not diplomacy: Outlook 7 March '14

Overview:  Collective mood indicates a trend toward war and away from diplomacy.  A major crisis directly impacting the U.S. people and government is immanent (most likely before 13 March).  This may be a new development in the Ukrainian crisis or something else.  It may well be the greatest crisis faced by the U.S. in years.  Markets are extremely overbought relative to daily social mood signals.  Market direction for today is unclear.

Near Term: Mood signals have shown a sharp drop while markets remain at or near record highs (see Google trends chart below).  Since social mood trend changes usually precede market trend changes, a sharp drop in the near term is likely.

Long Term: Collective mood has been in a many month long process of topping.  Long term indicators are flashing "extreme caution," and are just below support, indicating a significant breakdown may be in progress.  The impact of human and natural disasters has been relatively low, but the trend is toward increasing impact.  Over time, this may wear on both mood and socioeconomic stability.

Today's Signals: +3.7 from Google Hot Trends, -0.5 from Themes in the News.  The projected stock market change for today is shown in the chart below.

(click to enlarge)

Mood signals from Google Hot Trends: On a daily basis, markets tend to follow social mood more often than not.  Overall, social mood trend changes usually precede market trend changes.
(click to enlarge)


Mood signals from themes in the news: 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.    

(click to enlarge)


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.

Wednesday, March 5, 2014

Latest Info on Global / U.S. Crisis: 6-13 March 2014

Early on 28 February, we posted about an imminent Global crisis that would strongly impact the U.S. and its people.  Hours later, the Ukraine crisis began.  The latest info shows that the U.S. impact from this or additional events will show up as soon as tomorrow.  This could be the beginnings of the greatest crisis the U.S. has faced in years.

This summarizes the available information from social mood patterns on this upcoming crisis:
1) The likely timeframe is March 6-13.  2) Although dramatic in effect on the U.S. it does not likely involve large U.S. casualties like most "disasters."  3) The social mood configuration shows a rising risk of panic.  4) The category of event is MoodCompass type NE which would usually show up as a) an economic disaster, b) an "attack" (i.e. a perceived "victimization") from a geopolitical entity, or c) if a natural disaster, a winter storm.  5) There is little chance of it being a natural disaster.  6) The precipitating cause is most likely an international disaster or crisis, meaning it could involve further fallout from the Ukraine crisis. 

The top chart below shows the relatively low estimated U.S. fatalities of this "disaster."  For this reason, as well as the indication of it originating outside of the U.S., we are referring to it as a "crisis."  If the second chart is looked at carefully, especially beginning with the Boston Marathon event, the pattern can be observed which makes this crisis appear especially serious.

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U.S. Panic as soon as tomorrow: Outlook 5 March '14

Overview:  Collective mood indicates rising risk of panic.  A major crisis directly impacting the U.S. people and government is immanent (most likely between 6-13 March).  This may be a new development in the Ukrainian crisis or something else.  It may well be the greatest crisis faced by the U.S. in years.  Markets are extremely overbought relative to daily social mood signals.  Market direction for today is unclear.

Near Term: Mood signals have shown a sharp drop while markets remain at or near record highs (see Google trends chart below).  Since social mood trend changes usually precede market trend changes, a sharp drop in the near term is likely.

Long Term: Collective mood has been in a many month long process of topping.  Long term indicators are flashing "extreme caution," and are just below support, indicating a significant breakdown may be in progress.  The impact of human and natural disasters has been relatively low, but the trend is toward increasing impact.  Over time, this may wear on both mood and socioeconomic stability.

Today's Signals: +0.6 from Google Hot Trends, +3.6 from Themes in the News.  The projected stock market change for today is shown in the chart below.

(click to enlarge)

Mood signals from Google Hot Trends: On a daily basis, markets tend to follow social mood more often than not.  Overall, social mood trend changes usually precede market trend changes.
(click to enlarge)


Mood signals from themes in the news: 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.    

(click to enlarge)


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.

Monday, March 3, 2014

Outlook 4 March '14

Overview:  Collective mood indicates rising risk aversion.  There is an extreme risk of a major natural disaster outside the U.S.  A major crisis directly impacting the U.S. people and government is immanent (within a few days away).  This may be a new development in the Ukrainian crisis or something else.  It could be the greatest crisis faced by the U.S. in years.  Markets are overbought relative to daily social mood signals.  A sell-off in the markets is likely.

Near Term: Mood signals have not rallied to record highs along with the markets (see Google trends chart below). and are breaking down below support.  A sharp drop in the near term is likely.

Long Term: Collective mood has been in a many month long process of topping.  Long term indicators are flashing "extreme caution," and are just below support, indicating a significant breakdown may be in progress.  The impact of human and natural disasters has been relatively low, but the trend is toward increasing impact.  Over time, this may wear on both mood and socioeconomic stability.

Today's Signals: -5.6 from Google Hot Trends, -3.5 from Themes in the News.  The projected stock market change for today is shown in the chart below.

  (click to enlarge)

Mood signals from Google Hot Trends: On a daily basis, markets tend to follow social mood more often than not.  Overall, social mood trend changes usually precede market trend changes.
 (click to enlarge)


Mood signals from themes in the news: 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.    

(click to enlarge)


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.

Sunday, March 2, 2014

Escalating Violence and Volatility: Outlook 3 March '14

Overview:  Collective mood indicates high risk of violence and geopolitical escalation.  A major crisis directly impacting the U.S. people and government is immanent (within a few days away).  It may be a new development in the Ukrainian crisis or something else.  It could be the greatest crisis faced by the U.S. in years.  Markets are extremely overbought relative to daily social mood signals.  A sharp sell-off in the markets is likely.

Near Term: Mood signals have not rallied to record highs along with the markets (see Google trends chart below). and are breaking down below support.  A sharp drop in the near term is likely.

Long Term: Collective mood has been in a many month long process of topping.  Long term indicators are flashing "extreme caution," and are just below support, indicating a significant breakdown may be in progress.  The impact of human and natural disasters has been relatively low, but the trend is toward increasing impact.  Over time, this may wear on both mood and socioeconomic stability.

Today's Signals: -19.7 from Google Hot Trends, -17.4 from Themes in the News.  The projected stock market change for today is shown in the chart below.

  (click to enlarge)

Mood signals from Google Hot Trends: On a daily basis, markets tend to follow social mood more often than not.  Overall, social mood trend changes usually precede market trend changes.
 (click to enlarge)


Mood signals from themes in the news: 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.    

(click to enlarge)


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.