Who's Afraid of the New Year?: Dec. 31, '16 - Jan. 6 '17

I can't tell you how your year is going to go, or mine for that matter.  Yet, for whatever reason, the top things we focused on a few weeks ago, the top internet search trends, are related to what's coming in the news, the markets, and even our own lives in the week just around the corner-- the week of the New Year!

The bringing in of the New Year is a time of hope and celebration.  Surely, it has to be better than the year we just had!  I'll leave it to others to compare the years, but we can get a glimpse at what might be different about the coming week from the week we just had.  In general, there should be a lot that's very similar to last week, but the part that's different, well, "Happy" may not be it for this New Year.
As I write this, I am still feeling the impact of more famous people of 2016 that we've lost this week (which is yet to be somehow woven into the events of a few weeks from now).  I am left wondering if as a society, we are in the midst of some kind of positive feedback loop. I feel obliged to give a warning, before you read further, that while this is based on research that is backed up with data and repeatable results, it may be a bit too different from current assumptions about how things work to be comfortable for some to consider.  If you must stop reading now, ranting about how this is all B.S, or other choice words, it would be understandable.

The top trends from the period reflected in the week beginning New Year's Eve and going through Friday January 6, 2017 have some similarities to those from the week before (see Forced Optimism: Dec. 24-30, 2016).  Just like last week, several of the trends reflect a strong masculine quality.  Dallas Cowboys, Lamar Jackson, Army Navy 2016, and the Patriots are all related to men's sports, specifically football.  In the trends pertaining to last week, there was also a male hero who died, John Glenn.  That goes up to two well known men who died this time-- Alan Thicke, best known as the father on Growing Pains, and Craig Sager, a sports reporter.  Similar to those for last week, the remaining three trends are related to entertainment.  Rogue One Trailer, the Star Wars spinoff movie, gives us a space adventure with a bit of nostalgia.  The Voice, a singing competition TV show, many find fun to watch.  The third one, Flip or Flop, has a twist to it.  This show about house flipping made it to the top trends because the couple hosting it is getting a divorce.

It's the difference between these two weeks that stands out to me.  An increase in themes about well known men who died and a focus on a break up instead of the show itself.  Just this alone, does not imply to me, a cheery way to start the New Year.  Let's look at it a bit more scientifically using the MoodCompass method, and see if that gives us a different picture.

First, the nine trends are broken down into themes: man, family, nostalgia, death, sports, loser, adventure, trophy, military, school, home, relationship, divorce, TV, music, winner, and reporter.  These are scored, and those scores are "normalized."  The result gives us relative amounts of four mood qualities¹: 14% Vulnerable, 38% Expansive 13% Manic and 36% Controlled.  In graphic form it looks like this:



There are two primary patterns I see in this.  1) A change in "optimism."  The previous week's optimistic High Expansive/Low Vulnerable pattern gives way as Manic becomes the low point.  Optimism, the "Happy" part of Happy New Year, appears to be losing its edge.  2) High emotions, especially fear or even panic is reflected in the High Expansive-Controlled pattern.  Putting these two patterns together, reaffirms my suspicion of a less than happy New Year's week in the news, in the markets, and in the overall ambience of many of our lives.

While societies have little choice as a whole, as individuals we have an array of responses and coping methods.  This is a heads up as to what the overall trend is for one week. It's not a week to expect people to be their most reasonable or rational selves.  Yet, it's certainly no reason to give up on a personal commitment to having a Happy New Year.  With this awareness of the general trend of the week, I will make an added effort to be around people that give me smiles and a sense of safety and well-being, and will commit to doing my best to keep my own head on straight.  Perhaps you can come up with ways to bring in the very best New Year for you.

At MarketMood.net, we also convert this information into expected market behavior for the week.  This particular week of emotional transition will have a different effect on the stock market, crude oil, the U.S. dollar, and gold.  We explore that in our member trading room. 

Forced Optimism: Dec 24-30, 2016

I can’t say what anyone in particular will be feeling next week, or how your particular family may get along or not for the holidays.  However, in general, the social mood for the Christmas weekend through the end of the week is not the best for the coziest of holiday gatherings.  I know this from looking at a few internet search trends, the ones we all said mattered most to us a couple of weeks ago.  For whatever reason, what we focused on a few weeks ago, is what shows up in the news, the markets, and our personal lives in the week just around the corner.

The internet search trends that give us a peek into the social mood for the week of Saturday December 24^th through Friday the 30^th are really strong in “masculine” heavy items.  Three out of the top seven are football teams (Pennsylvania State, Raiders, and Dallas Cowboys).  Add to that a legendary man, space explorer and hero, John Glenn.  The remaining three are performance and art related.  There’s Hairspray live, the musical; Fantastic Beasts and Where to Find them, a movie primarily for children; and the Victoria Secret Fashion Show, primarily for grown-ups.

Extracting the major themes contained in the seven search terms we found: men, sports, winner, loser, school, music, live, hero, nostalgia, death, movie, children, model, and show.   These themes are scored, and after those scores are added and “normalized” what we end up with is relative levels of four primary mood qualities.  For this week, 13% Vulnerable, 50% Expansive, 16% Manic, and 21% Controlled.  In graphic form it looks like this:

 

To get to the “not the coziest” conclusion, requires analysis of the relationship of these four mood qualities.  This is what I see in this week’s social mood configuration: 1) High Expansive/low Vulnerable is associated with optimism, and with heading in a direction or specific way forward.  2) Expansive/Controlled being the two highest goes with high emotions, passion, and/or panic.  3) Expansive high and the other three much lower is associated with “bravado” or putting on a show of competence, leadership, optimism, etc.   In other words, “forced optimism.”  While #1 could add a bit of jolliness to a party or gathering, in combination with #2 and #3, this same component could look like arrogance, stubbornness, or strong opinions.  If your group has a good “diplomat” (a trait of "Vulnerable" which is needed to balance "Expansive") things may go fine.  If not, don’t be surprised to see some head butting.

The way this mood pattern might show up in the week’s news events would be a focus on geopolitical or presidential “chest pounding,” some passionate responses or panicky behavior or expressions, and a sense of show or overdoing it.  With “Vulnerable” low, it’s not going to be a good week for diplomacy in general.

One thing further we do at MarketMood, is translate each of these mood components into stock market behavior.  For this Christmas holiday week, here’s what we might expect the market to do with those same three mood components: 1) a directional push, likely bullish, 2) a bearish drop, and 3) an exhausted market’s attempt at remaining bullish.  Our algorithm would add these three together to get a likely overall direction.

So, if you can’t find a cozy space for the holiday week, perhaps you'll experience a jolly one.  If not that, it’s certainly a good time to put on a smile and just get through it.