Freaking Out ‘N Moving On: Jan 21-27 2017

There’s a new U.S. President in town.  Some people are excited, and some are really quite upset.  A great tension has built up since Election Day surrounding the beginning of Donald Trump’s term.  This build up of foreboding and impending doom even showed up in the weekly top internet search trends that we track and analyze, and was discussed in last week’s post.  This tension is about to be released.

The chart below shows the ups and downs of the four primary mood qualities that all search trends are converted to in our analysis (for whatever reason, what we collectively focus on, i.e. the search trends, shows up in the news, the markets, and general ambience about three weeks later).  The gray line (Controlled) goes steadily up from early November to Inauguration Day and then drops off sharply over the next two weeks.  That sharp drop and its reverberations should be visible this week in the news cycle, in the stock and commodities markets, and the overall mood.



Another part of the analysis is identifying the patterns that show up.  Two have been identified for this week.  First there is a pattern that is associated with high emotions, passion, and panic which began last week and completes this week.  The second is a pattern which is directional, forward moving, and generally optimistic.  This begins sometime this coming week and continues into the following week.

In our members’ trading room at MarketMood.net we also translate these patterns into market forecasts for the coming days and weeks.  Undoubtedly, the coming week should be topsy turvy and highly volatile as one pattern completes and the other begins.  Hang on to your hats!

End of the World as we know it: Jan 14-20, 2017

The Obama administration is coming to an end.  While some may be celebrating, for others it might as well be the end of the world.  In tracking the weekly changes in social mood, I've noticed a slow and steady increase in a somber and foreboding mood quality since the U.S. presidential election.  The good news is that it reaches a peak in the coming week, and then drops off sharply.  The bad news is that it reaches a peak in the coming week.

For whatever reason, the things we focus on as a society show up in the stock market, in the news, and in the general ambience of our lives shortly after.  We know this because the hottest daily internet search trends contain information about what the markets are going to do, and the types of news stories that could come up about three days later.  When we look at the mood qualities found in the search trends on a weekly basis, these qualities show up in the markets, the news, and in general, about three weeks later.

I find it fascinating that as we come upon this ending of a way of being in America, and how America conducts itself, that the data I'm looking at for this week of endings is the last week of 2016-- another ending.  There was a lot of loss in that week.  The biggest search trends focused on two amazing women, Carrie Fisher and Debbie Reynolds, a famous mother and daughter who both died only a few days apart.  Other public figures lost that week, which were also among the top trends, were George Michael and Ricky Harris.

It makes sense that if all that went on that last week of 2016, which in kind is to somehow become a part of this last week of the Obama presidency, that this would be a time for grief and trepidation.  Yet, as uncertain as it is, the "New Year" comes and we adjust to what is.  This chart (below) shows the four mood qualities that I track.  If you look at that gray line (Controlled) that steadily and unusually rises since early November, you will see that it sharply drops after this week.  That represents this extremely serious and foreboding mood ever increasing from election day through Inauguration day.  Another interesting thing about this coming week is the overlay of the purple line (Expansive) and the gray line (Controlled).  This is associated with strong emotions, irrational behavior, and panic responses.



With all the uncertainties in getting a new president, especially this one, it's not surprising to see this about next week.  It's fascinating that this information came from events we Googled about three weeks ago.  It may also not be surprising that markets could be quite sensitive and make large swings in either direction (panic responses) with little stimulus in this last week of a somewhat known quantity.  This is a week when "fear itself" may be the greatest adversary to stability.  We will be closely watching the daily signals in our member trading room at MarketMood.net.

When I find myself experiencing this dread of the unknowable and unpredictable dawn of Orange America, I remind myself that I don't need to get wrapped up in it.  What is happening is; and even if it's the end of an era, or the end of a world, I can remind myself of the detached wisdom of R.E.M.: "It's the end of the world as we know it, and I feel fine."