Outlook 11 December '13

after market update: actual S&P -20.4 (-1.3%); Markets were down hard today as investors find it more likely that the FOMC will begin tapering Quantitative Easing.  The sharp downturn is in line with the near term mood outlook as well as the near term market outlook (below).  However, with markets oversold versus the daily signal, will they at least try to bounce overnight or tomorrow?

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Overview: The social mood pattern for today reflects desperate aggression.  Themes in the news reflect destruction, deterioration, or disaster, with a possible connection with government or government intervention.  Markets may be mixed and confused as the question over long term direction is pondered.

Today's Market Outlook is nearly unchanged to slightly down (0% to -0.2%).  The social mood signal is slightly down, and the signal from themes in the news is near unchanged.  Watch for either a confused, mixed market or a possible abrupt shift. The projected stock market change for today is shown in the chart below.

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Near term mood outlook: desperate aggression.  Themes in the news reflect destruction, deterioration, or disaster, with a possible connection with government or government intervention..  The combined pattern of news and social mood reflects an elevated global risk of violence, protests, and an elevated risk of geopolitical escalation; there are rising economic concerns in the background.  

 

Near term market outlook: The social mood signal is indicating a serious downturn in social mood that is likely to be followed by the markets. 

 

Longer term outlook: The overall social mood trend has been in what appears to be a topping process for many months.  This topping process appears to be in its final stages.  A sharp market drop of more than 15% indicated by long term mood and market charts, appears very close to beginning.

 

Today’s social mood signal is -2.9 S&P points as of the time of this posting.  On a daily basis, markets tend to follow social mood more often than not.  Overall, social mood trend changes often precede market trend changes.

 

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Today’s news signal is -0.3 S&P points as of the time of this posting.  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.    

 

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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.

Social Mood Deteriorating; Markets to Follow: Outlook 29 Oct. '13

after market update: actual S&P +9.8 (+0.56%); Mood has turned down, markets haven't caught on yet.  As long as markets remain below 1780, we are bearish.

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Overview: Social mood appears to be deteriorating, and reflects both aggressiveness and instability.  The themes in the news are associated with the perception of destruction, deterioration, or disaster.  Mood is turning down, markets are likely to follow.

Today's Market Outlook is turning down (-0.3% to -0.5%);  Both social mood and news signals are negative for today.

 

Near term mood outlook: The social mood pattern corresponds with aggressiveness and instability.  The mood themes found in the news are associated with destruction, deterioration, or disaster.  The combined pattern of news and social mood, at times, accompanies global themes of violence, protests, and instability.

 

Near term market outlook: The social mood signal is brushing against resistance (see this post for more info), so it will have a difficult time climbing past current levels.  Markets should pause or turn down from here.

 

Longer term outlook: The overall social mood trend has been in what appears to be a topping process all year.  There are no clear signals that this process will be over anytime soon.  Yet, a sharp drop of more than 10%, just around the corner, is indicated by long term mood and market charts.

 

Today’s social mood signal is -8.5 S&P points as of the time of this posting.  Markets tend to follow social mood more often than not. 

 

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Today’s news signal is -5.5 S&P points.  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.    

 

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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. 

Outlook 28 Aug '13: News and Markets deteriorate further

Near term outlook: The social mood pattern corresponds with violence, uncertainty, and instability.  Common news events associated with the current pattern are terrorist activity, geopolitical escalation, and extreme polarization (e.g. us vs. them, "good guys" vs. "bad guys).  Also, events that portray a theme of action, fires, and explosions. 

Longer term outlook: The social mood trend is down.  The stock market is 8% above what social mood will support.  This divergence should be approaching resolution over the next few months.

Today's market outlook is down.  The news signal is more negative than the previous two days.  A climax could be near.  The social mood signal is slightly positive, but has a negative momentum.  Over the past few days, markets have primarily been following the news signal.

after market update: actual S&P +4.5.  However, immediately after market close, there was a large spike in VIX futures (i.e. the fear index).

Today’s social mood signal is +3.9 S&P points (with a negative momentum headwind).  Markets tend to follow social mood more often than not. However, over the last few days, the news (and the news signal) has been the dominant market influence.
  

Today’s news signal is -10.0 S&P points.  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.  The news signal is accelerating in its downward turn, but has yet to catch up with the markets. 

 

Violence and Volatility: Global Outlook Wk of 19 Aug '13

Social Mood patterns indicate a spike in factors related to violence and volatility.  This pattern signals even more global violence and instability in the next few days.  Markets continue to look shaky as the week begins.  To add to the uncertainty, a short term trend change is near.


Update 8/23/2013:  There definitely was a spike in global violence, with the primary example being the Syria chemical attack and the possible counterattacks currently on the table. In the markets, there was at least a short term trend change as the markets continued down into mid-day Wednesday and then climbed through Friday.