Stock Market Panic Ahead?

As we await more information about a tragic event that should strongly impact the U.S. any day now (signal indicates most likely timeframe August 1-8, see previous post), the stock market is indicating strong bias toward a sharp sell-off.  In addition, today's social mood is showing a shift toward "panic."  Something big is brewing.  The chart below shows how the stock market has been generally in the same spot for three weeks, while social mood has lead the way steadily down (mood most often leads the market's direction).

 

U.S Disaster, 1st Week of August, 2014

A U.S. disaster signal has been detected by the MoodCompass Project team after many months of little to no U.S. disaster activity.  It should be of significant emotional impact to most people within the U.S., and will most likely include loss of life greater than seen in average news stories; economic losses are also likely.

We will wait a few more days before presenting further information about the likely type of disaster while we sift through our data, and get additional information.

A disaster signal is generated when the relationship between U.S. social focus (social mood measured by top Google Hot Trends) and social mood factors found in the top U.S. news stories meets certain criteria.  You can see in the chart below, that the U.S. disaster mood factor today spiked up from the low range area it normally hovers in.  This means that there is a significant risk of a U.S. disaster in the near future, most likely between 7 and 14 days from now, or August 1 - 8.

(click to enlarge)

 

The second chart (below), is a snap shot of the intensity of these factors.  The greatest specific threat showing up as of today is mass violence or terrorism.  However, we will be getting more information in the next few days.

 

(click to enlarge) 

 

 

Time to Panic?

We've been watching the setup develop for months of what has turned out to be a long and painful process, as the world fights to hold on to a sense of growth, expansion, and/or aggression (the alternatives being contraction, depression, and/or despair).  We called the first chapter of "World in Crisis" which we then discovered included the beginnings of the Ukraine crisis, a missing Malaysian airliner,  and a Korean ferry disaster.  Part II of this "World in Crisis" phenomenon saw ISIS take parts of Iraq and Syria, eruption of conflict with Israel/Gaza, further escalation in Ukraine, and another downed Malaysian aircraft with all aboard lost.  Part III is nearing.

There has been a steady negative social mood trend for two weeks.  Intraday movement (volatility) has begun to increase in the stock market, yet markets have managed to stay nearly flat.  Pressure is leaning on the markets for a 3% drop, just to catch up to where social mood has recently deteriorated to. The grand finale we have been watching for in the recent series of world events is not yet here, but as said previously, a drop in the market should be a clear signal that it's getting close.  The next few days could be quite informative.