Wishing Hard for Christmas Cheer: Outlook 16 December '13

after market update: actual S&P +11.22 (+0.6%); Markets were up today, resolving the large divergence between mood signal and market.  The wish for Holiday Cheer (optimism) in today's social mood appears to have been satisfied, and was stronger than today's calculated mood signal.

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Overview: The social mood pattern for today reflects a desire for leadership, direction, and optimism.  Themes in the news reflect destruction, deterioration, or disaster.  Markets could be sharply down today, but may try to rally in line with the collective desire for optimism.  There is still a U.S. disaster/tragic event watch for few more days (see More Info on Next U.S. Tragedy).

Today's Market Outlook is down ( -0.5% to -0.7%).  Both the social mood signal and the signal from themes in the news are down.  A climax may be near.  The projected stock market change for today is shown in the chart below.

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Near term mood outlook:  a desire for leadership, direction, and optimism.  Themes in the news reflect destruction, deterioration, or disaster.  The combined pattern of news and social mood reflects an elevated global desire for leadership, direction, and optimism; and an elevated risk of geopolitical escalation.  

 

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, may be in its early stages.

 

Today’s social mood signal is -11.8 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 -8.5 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.