A Very Scary Week: Aug 16-22, 2015

Next week's news stories will be violent and volatile, and the mood in the U.S. extremely serious, according to social mood projections. 

The stock market the week of Aug 16 should see an end of a pattern.  The most likely move is sharply down at least through sometime on Friday.

 

A News Driven Week: Mood & Market Aug 9-15, 2015

 

This week is all about the news (or data), especially news outside of the United States, and building tension surrounding it.  People are feeling generally anxious as the week begins.  There should be a shift around Thursday as the background news becomes more volatile or violent, and people begin to feel more cautious.

 

The way this pattern plays out in the market is not exactly bullish, but is markedly different from the previous week.  There should be a noticeable shift on Thursday from what takes place on Monday through Wednesday.  Whether the "Aversion" taking hold on Thursday manifests as short covering in the stock market or a sell off will depend on how the market does on Monday-Wednesday.

 

U.S. Disaster Nears: Outlook 31 January '14

after market update: actual S&P -11.6  The market was moderately down, in line with social mood signals.  When the disaster signal peaks indicating a U.S. tragic event is imminent, we will announce that.  Hopefully, it has nothing to do with the upcoming Superbowl this weekend. 

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Overview:  Collective mood shows aggression, and perceptions of deterioration.  Mood signals for the day indicate a moderate decline in the markets is likely.  A U.S. disaster or major tragic event is a few days away (see 28 Jan. post).  The curve we have been waiting to top is showing signs of peaking, but has not yet turned down.  When it does, the anticipated event becomes imminent (within a day or two).

Near Term: Global mood trends imply a profound transformation in the global landscape taking place in the background.  It may be another few days to a few weeks to know all that this is pointing to.  The social mood trend had been turning down sharply, but after briefly bouncing off support has been scraping along it (see Google trends chart below).  

 

Long Term: Collective mood has been in a many month long process of topping.  Long term indicators are flashing "caution," yet there is no definitive signal that a major market shift is imminent.  The impact of human and natural disasters of late has been relatively low, but the trend is toward increasing impact.  Over time, this may wear on both mood and socioeconomic stability.

 

Today's Signals: -7.3 from Google Hot Trends, -2.1 from Themes in the News.  The projected stock market change for today is shown in the chart below.

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Mood signals from Google Hot Trends: On a daily basis, markets tend to follow social mood more often than not.  Overall, social mood trend changes usually precede market trend changes.

 

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Mood signals from themes in the news: 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

Big Bad News this Weekend?

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Individually, this might be a great weekend for many people.  On a global scale, there is a big bad news story likely just around the corner.  Stock market trend changes tend to follow just behind social mood changes.  The news, on the other hand, tends to lag just behind that (believe it or not).  Social mood started showing a sharp drop beginning on January 12, 2014 (see #1 in chart above).  At this same time, the stock market was still moving sideways.  The news signal was still going up until January 22 (see #1 in chart below).

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The market is now sharply dropping.  According to the social mood signal (see #2 in Google Hot Trend chart), it should pause at least briefly in the S&P 1780 to 1800 area.  The news signal, on the other hand, has not yet shown its sharp drop.  That may come as soon as this weekend (see #2 in News chart).  It's possible that a "big bad news story" could accompany this.  It is also possible, that a relieving news story occurs relatively soon that leads to the market pause or bounce which is also right around the corner.

Please note that these are preliminary charts and were produced with data available as of January 24.  The official January 27 chart is not released until midnight (E.T.) of January 27.  Because of this we will not yet comment on area #3 in the Google Trends chart.

Don't miss out on seeing our global and U.S. overview for the year 2104 at: http://moodcompass-world.blogspot.com/2014/01/2014-global-and-us-overview.html
 

Boredom or Bedlam? : Outlook 15 November '13

after market update: actual S&P +7.5 (+0.42%); Markets rose today at a slow crawl, causing them to be slightly overbought relative to social mood.  Monday might see a pause in the rally, depending on what happens with collective mood over the weekend.

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Overview: Social mood is reflecting uncertainty, confusion, and the unexpected.  At the time of this posting, social mood is showing a slight dip.  It is likely that if there are no major news headlines, that markets will be little changed today.  However, with the unexpected built into today's collective mood, we should be ready for anything.

Today's Market Outlook is near unchanged to down (0% to -0.2%);  the social mood signal is slightly negative and the signal from themes in the news is near unchanged.  However, news theme signal momentum indicates a trend change is near.  The projected stock market change for today is shown in the chart below.

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Near term mood outlook: Social mood is reflecting an ending of a theme or chapter.  The themes in the news reflect uncertainty and confusion.  The combined pattern of news and social mood reflects a global perception of uncertainty, confusion, and the unexpected.  

 

Near term market outlook: Unless the collective mood signals drop sharply from current levels, it is expected that markets will continue to climb in the near term.

 

Longer term outlook: The overall social mood trend has been in what appears to be a topping process for many months.  There are no clear signals that this process will be over anytime soon.  Yet, a sharp market drop of more than 15%, likely within the next few months, is indicated by long term mood and market charts.

 

Today’s social mood signal is -3.2 S&P points as of the time of this posting.  On a daily basis, markets tend to follow social mood more often than not. 

 

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Today’s news signal is +0.5 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.

Eyes on Washington; Market Breakdown?: Outlook 26 Sept '13

after market update: actual S&P +5.88 (+0.35%); There was a focus on Washington, yet the markets climbed anyway.  There was an upward breakout followed by a drop to near unchanged, ending with about half of the early gains.  Markets were one directional, as forecasted, refusing to spend one moment negative today. 

BTW, the reason for the uncertainty around direction of breakout on our end (see Today's Market Outlook below), was that the social mood to market model was in the midst of a polarity flip today. We could tell that the markets today would be directional, but not which direction.
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Overview:  The mood shows movement in a specific direction; a focus on leadership.  After two doji days, markets should be ready to make a definite move.  Will U.S. government leadership shake things up today?  Will it be a break down or break through?

Today's Market Outlook is Unchanged to Breakout (near -0.1% or breakout move in either direction).  Both social mood and the news appear to be slowly breaking below support.  A large market drop may be at hand.  At the time of this posting, both the social mood signal and the news signals are slightly negative.  There is therefore a bias in the negative direction.  The mood, however, will support a one directional move in either direction.

 

Near term outlook: The social mood pattern corresponds with leadership and directional movement.  Common news themes associated with the current news mood pattern are uncertainty, confusion, and volatility.  The combined pattern, at times, accompanies global themes of violence, instability, terrorist activity, and geopolitical escalation.  Diplomatic endeavors or negotiations are not likely to succeed at this time, as a mood of genuine cooperation is almost non-existent.

 

Longer term outlook: The social mood trend has turned down; the bounce over the last month appears to be complete.  However, confirmation of a continuation of the long term downtrend has not yet occurred.

 

Today’s social mood signal is -2.6 S&P points.  Signal is at support, the next few days are critical to direction.  Markets tend to follow social mood more often than not.

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Today’s news signal is -1.9 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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A new News Cycle; Markets Topping: Outlook 12 Sept '13

after market update: actual S&P -5.71 (-0.34%) Markets climbed to less than 1 point above the zero line before turning down in a choppy fashion!

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Overview: Today's mood shows an attempt to maintain positive momentum, but the news signal shows something new coming over the horizon that might put a damper on that.  Social mood signal momentum is increasingly negative showing a strong pull against continued upward motion.  Markets are in a topping process.  Markets may, with a struggle, make it slightly above the zero line today.  While the bias is still positive, markets could be choppy as forces pull in both directions, vying for dominance.

Near term outlook: The social mood pattern corresponds with directed action, violence, and instability. Common news events associated with the current pattern are related to instability, terrorist activity, violent protests, fires and events reflecting themes of confusion or surprise.  Natural events associated with this pattern are earthquakes and violent storms.

Longer term outlook: The social mood trend has turned positive within a larger downward trend.  The positive bounce has near run its course; resuming of the larger downtrend is near.  

Today's Market Outlook is Up / Mixed.  The social mood signal is moderately positive and the news signal is slightly negative as of the time of this posting.  Both social mood and news signal momentum indicate an increasing risk of trend change. 

Today’s social mood signal is +9.4 S&P points.  Markets tend to follow social mood more often than not.  Mood signal is  moderately positive at the time of this posting, but social mood momentum indicates a trend change is near.

  

 

 

Today’s news signal is -0.5 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.  As of the time of this publication, the news signal is slightly down and indicates an imminent trend change.  

 

 

Courting Disaster: Outlook 5 Sept '13

Near term outlook: The social mood pattern corresponds with violence, self-sacrifice, and group ideology.  This combination has an eerie ring to it, and conjures images of suicide bombers or jihad.  Common news events associated with the current pattern are geopolitical escalation, religious disagreements, and volcanoes.  Also, events that portray a theme of destruction, especially natural disasters. 

end of day update-- some top news stories with today's themes:
Iran Plots Revenge, US Says

Longer term outlook: The social mood trend is down.  The stock market is 11% above what social mood will support.  This divergence should be approaching resolution over the next few months.

Today's Market Outlook is Slightly Down.  Both the social mood signal and news signal are slightly negative as of the time of this posting.

after market update: actual S&P +2.00.

Today’s social mood signal is -1.6 S&P points.  Markets tend to follow social mood more often than not.  The mood is somewhat more serious than yesterday.  Also, the social mood signal is at resistance.  It will be difficult for it to continue to get much higher in the near term.

  

 

Today’s news signal is -2.2 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.  As of the time of this publication, the news signal is down.  Also, the huge divergence between news level and the stock market actuals indicate that extremely positive or extremely negative news could be very near.

 

 

Bad news; Markets down: Outlook 4 Sept '13

Near term outlook: The social mood pattern corresponds with extreme polarization (e.g. us vs. them, "good guys" vs. "bad guys), "new realities," and natural disasters.  Common news events associated with the current pattern are destructive events, terrorist activity, and technology news.   Also, events that portray a theme of violence, vulnerability, and the unexpected. 

Longer term outlook: The social mood trend is down.  The stock market is 9% above what social mood will support.  This divergence should be approaching resolution over the next few months.

Today's Market Outlook is Slightly Down.  Both the social mood signal and news signal are slightly negative as of the time of this posting.

after market update: actual S&P +13.31. 

Today’s social mood signal is -0.8 S&P points.  Markets tend to follow social mood more often than not. 
  

 

Today’s news signal is -0.5 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.  As of the time of this publication, the news signal is down.  Also, the huge divergence between news level and the stock market actuals indicate that extremely positive or extremely negative news could be very near.