Thursday, December 22, 2016

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 24th through Friday the 30th 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.

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