Rising Uncertainty: Mood & Market Aug. 2-8, 2015

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Change is in the air, and uncertainty is rising, according to U.S. collective mood projections for the week of Aug 2.  Expect earlier understandings and assumptions to be challenged, and people to be even more challenging.  A background of international issues are likely to be in the news, and have the attention of U.S. people.

 

Markets could be extra confusing or constricted for much of this week.  Although there is the possibility of a market disruption of some type, overall, it looks like it would probably be a good week for traders to take a vacation.     

Uncertainty vs. Hope: Market Mood July 13-17, 2015

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The week of July 13 is characterized by a struggle between uncertainty about the global situation and the desire to hope that everything is going to be OK.  This will create an unusually choppy (or whipsaw) condition in the markets.  Spatial analysis shows risk aversion in the United States to be slightly less this week than last week.  While conditions are not yet clearly bullish, they appear to be less bearish than the previous week.

 

 

Tentative optimism is projected to wane early in the week and be replaced by a nervous hope midweek.  By the end of the week, it may seem that it was too early to hope, as strong market moves return to the picture.

 

Outlook 27 February '14

Overview:  Collective mood indicates high risk of violence and increasing uncertainty globally.  Markets are extremely overbought relative to daily social mood signals.  A sell-off in the markets is likely. 

Near Term: Mood signals have not rallied to record highs along with the markets (see Google trends chart below). and are breaking down below support.  A sharp drop in the near term is likely.

 

Long Term: Collective mood has been in a many month long process of topping.  Long term indicators are flashing "extreme caution," and are just below support, indicating a significant breakdown may be in progress.  The impact of human and natural disasters 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: -7.6 from Google Hot Trends, -4.1 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.

Violent Uncertainty: Outlook 26 February '14

after market update: actual S&P +.04  Markets were extremely uncertain, and are now extremely overbought relative to daily social mood; a reckoning is very near.  

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Overview:  Collective mood indicates rising risk of violence and increasing uncertainty globally.  Markets are extremely overbought relative to daily social mood signals.  A slight sell-off in the markets is likely. 

Near Term: Mood signals have not rallied to record highs along with the markets (see Google trends chart below). and are breaking down below support.  A sharp drop in the near term is likely.

 

Long Term: Collective mood has been in a many month long process of topping.  Long term indicators are flashing "extreme caution," and are just below support, indicating a significant breakdown may be in progress.  The impact of human and natural disasters 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: -6.2 from Google Hot Trends, -0.1 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.

Uncertain Exuberance: Outlook 21 Jan '14

after market update: actual S&P +5.1.  Great day of exemplifying social mood playing out in the markets-- a large rally followed by a large drop followed by a mediocre rally.  Awesome!

 

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Overview:  Collective mood shows sharply rising aggression and willingness to take action. Mood signals for the day indicate a market that would like to rally significantly, but is still overbought relative to social mood and might have difficulty making or maintaining the large upward move suggested by mood signals.

 

Near Term: Global mood trends show sharply rising uncertainty and contrariness.  This is combining with rising aggression and willingness to take action.  Social mood trend had been turning down, but has reached support.  This may pause or reverse the downtrend in the near term. 

 

Long Term: Collective mood has been in a many month long process of topping, but there is no sign 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: +4.5 from Google Hot Trends, +18.6 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.

Stuck in Uncertainty: Outlook 17 January '14

after market update: actual S&P -9.4.  Markets rose to unchanged and retreated, trying to correct the over-exuberance of the past few days.

 

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Overview:  Collective mood shows sharply rising uncertainty and ambiguity. Mood signals for the day indicate a market that has little room left to rise, and markets highly overbought relative to social mood.  In other words, it wouldn't take much of a nudge to initiate a sharp sell-off, but a big rally is really tough to get going.

 

Near Term: Global mood trends show sharply rising uncertainty and ambiguity.  Near term social mood trend had been pushing against a "ceiling" (see Google Hot Trends chart below) but now  appears in process of turning down sharply. 

 

Long Term: Collective mood has been in a many month long process of topping, but there is no sign 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: -7.0 from Google Hot Trends, +8.3 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.

November 2013 - Growing Economic Uncertainty and Civil Unrest

One of the many benefits of looking at collective mood is that one can get a heads up on prosperous times, and times of more uncertainty and social angst.  The information is perhaps more general than one would desire, but it is still helpful in planning for near future storms or celebrations.

Coming into the month of November is a hopeful United States, and to some extent the world.  Perhaps the worst is behind us?  Perhaps we conquered the problems of the Great Recession after all?  Maybe things are going to really start to get better?

Yet, that is not the picture for November.  Globally, the primary concern is associated with economic issues.  While, as usual, the people of the United States will try to assume that this doesn't apply to them, the U.S. is not exempt from the November turmoil.

The top issues associated with the mood configurations for November: economic uncertainty, bonds and interest rates, new and unexpected problems, denial, fighting, arguing, and protests.  Overall, this is a month of transition.  In the long run, what will matter is how we resolve this transition in December and January.  Do we enter a new global era of prosperity and stability or does cooperation become so elusive that it all starts to unravel?

Likely stock market direction for the month: mixed to down.

Surprising News: Outlook 15 Oct. '13

after market update: actual S&P -12.1 (-0.7%); Not sure the news was that surprising so far today, although it has seemed to rattle the hopeful camp some.  This morning people were somewhat optimistic a deal was near in the U.S. shutdown.  As of market close, each group seemed to still be boldly marching in their own direction with little chance of resolution this evening.  Are there more or larger surprises ahead?  The market call for today of uncertain/mixed played out well.  The markets today opened sharply down, climbed back above zero about two hours in, went sideways for a few hours, then ended back at the lows.

evening update:  Here's a surprise:  House vote delayed, chaos continues.  "Reid said he was 'blindsided by the news from the House.'"

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Overview:  A U.S. government shutdown is in day 15, and participants should be aggressively and desperately pushing their side's agendas while trying not to appear weak or vulnerable.  Social mood today is supportive of a possible breakthrough in group leadership or doing the right thing for the group (a shutdown deal?)  The mood depicted by themes in the news is uncertainty, confusion, mania and the perception of "bad news."  If the stock market starts in one direction, look for possible breaking news to change the direction.

Today's Market Outlook is Mixed / Uncertain (-0.7% to +0.7%).  At the time of this posting, the social mood signal is moderately positive, yet the signal from the news is moderately negative.  If the market turns down, the overbought condition of the market (relative to collective mood) may result in a sharper drop than indicated by the models.
 

Near term mood outlook: The social mood pattern corresponds with a desperate forward pushing, and trying not to appear weak or vulnerable.  Social mood today is supportive of a possible breakthrough in group leadership or doing the right thing for the group.  Could there be a deal in the debt/shutdown crisis?  Common themes associated with the mood pattern found in the news are uncertainty, the unexpected, chaos, protests, and terrorism.  The combined pattern, at times, accompanies global themes of violence, instability, and terrorist activity.

 

Near term market outlook: Social mood is hovering near support (see chart below).  A serious breakdown in the markets may begin at any time.

 

Longer term outlook: The social mood trend is down.  The overall market trend should be down. 

 

Today’s social mood signal is +11.4 S&P points.  Markets tend to follow social mood more often than not. 

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Today’s news signal is -11.0 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.    

 

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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. 

Trying to Ignore the Inevitable: Outlook 30 Sept '13

after market update: actual S&P -10.2 (-0.6%); Markets started down about 1%, then climbed to near unchanged and then back down in a choppy fashion.  Denial of the inevitable, and hope that there will be a last minute deal kept markets from falling further than they did.

News story that captured today's denial of irrationality theme almost exactly:  The Republicans Fighting Obamacare Aren't Crazy
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Overview:  A U.S. government shutdown appears inevitable at this point, and the strongest negative influence is coming from the high uncertainty in the news.  Social mood reflects a desperate pushing to disprove weakness or vulnerability, while the themes in the news reflect an active denial of appearing irrational or delusional.  Markets could be confused and choppy, but most likely down.

Today's Market Outlook is Sharply Down to Near Unchanged (-0.2% to -0.8%).  At the time of this posting, the social mood signal from over the weekend is slightly negative, and the signal from the news is strongly negative.  Signal momentum indicates a choppy and confused market is possible today; although most likely down.  The markets will likely stick closer to the news signal for the next few days.

 

Near term mood outlook: The social mood pattern corresponds with an agenda of disproving weakness or vulnerability.  Common themes associated with the mood pattern found in the news are uncertainty, confusion, volatility, and trying to deny or disprove irrationality.  The combined pattern, at times, accompanies global themes of violence, instability, and terrorist activity.

 

Near term market outlook: The social mood curve may be turning up.  If so, a large market bounce could be due within a few days (would that also mean a U.S. government deal could be reached this week?).

 

Longer term outlook: The social mood trend has turned down, but not definitively.  Confirmation of a continuation of the long term downtrend has not yet occurred.

 

Today’s social mood signal is -12.1 S&P points (the entire weekend signal, Saturday thru Monday, is -3.1 S&P points).  Markets tend to follow social mood more often than not.  Signal is near support, the next few days are critical to direction. 

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Today’s news signal is +3.5  S&P points (entire weekend signal, Saturday through today, is -13.2 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.    

 

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Today's expected stock market range is calculated as -3.1 S&P points (weekend social mood signal) or -13.2 S&P points (weekend news signal)  -0.2% to -0.8%.  

Riding the Budget Roller Coaster: Outlook 27 Sept. '13

after market update: actual S&P -6.92 (-0.41%); Markets started with a big drop and spent the rest of the session choppy and sideways.  The Nasdaq was positive for part of the session, but the DOW and S&P stayed negative.  For today, the news weighed more heavily than the mood.  Yet, the "gotta  keep pushing, gotta stay hopeful" mood likely prevented the markets from falling more than they did.

If both the mood and the news go south over the weekend, that could spell big trouble next week.
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Overview:  Although it looks unlikely at this point that the government will be able to work things out in time to avoid either a shutdown or default, people in general don't seem to be excessively worried about it right now.  Social mood reflects desperate pushing towards competing goals.  This, combined with the high uncertainty in the news, could leave markets rallying one minute only to fall in the next.

Today's Market Outlook is Mixed to Up (-0.1% to +0.7%).  At the time of this posting, the social mood signal is positive, yet the signal from the news is slightly negative.  Signal momentum indicates a choppy market is likely today as competing forces vie for control.  Watch for news events to impinge on any rallies that may develop.

 

Near term outlook: The social mood pattern corresponds with desperately pushing toward a goal (and competing with others pushing toward other goals).  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, and terrorist activity.

 

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 +13.2 S&P points.  Markets tend to follow social mood more often than not.  Signal is at support, the next few days are critical to direction. 

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Today’s news signal is -0.2 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.    
 

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Celebrating Uncertainty... at least for now

Syria is not going to get blasted by the United States, at least for the moment.  Uncertainty often causes stress, but at least this time, both the social mood signal and the mood signal obtained from the news show that this is being experienced by the people of the U.S. and perhaps the world as somewhat of a relief.

The current mood is extremely unstable; however, nothing lasts forever, right?  This is a moment that collectively we relax into the unknown, while at the same time feeling the agitation of the unkowningness of it all.  It isn't comfortable, but at least it isn't a new war... or at least not today.

While U.S. markets are closed on Monday, global markets could have a good rally, at least for most of their sessions.  If the U.S. stock market was open on Monday, collective mood signals suggest markets would likely gain between 0.5% to 1.2%. 

What a funny thing social mood is.  People are afraid of what might happen, then relieved at what won't happen... for now.  Yet, life is always uncertain.  Sometimes, perhaps, we are more aware of it.  Still, what social mood is clearly saying at this very moment, regardless of the hold put on a U.S. strike on Syria until congress can debate it, is that something highly destructive is gearing up to take place.  And it doesn't look like it cares whether or not congress is there to debate it or not.

There is no clear signal at this point that it is tomorrow or even the next day.  However, it isn't likely going to wait until congress is back in session.  But, for now, we should all get back to celebrating because today is not the day that this thing is going to happen, certainly.

Outlook 29 Aug '13: High Uncertainty; Markets Little Changed or Turning Down

Near term outlook: The social mood pattern corresponds with uncertainty, surprises, and confusion.  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 destruction, instability, 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 Little Changed or Turning Down.  Both the social mood signal and news signal are slightly positive.  However, with the mood signifying uncertainty and the unexpected, any news or rumor could tip the balance at any time.

after market update: actual S&P -3.2.

Today’s social mood signal is +2.5 S&P points.  Markets tend to follow social mood more often than not. However, bulls should be cautious as the social mood signal is near resistance, meaning not likely to get much higher in the near term.
  

 

Today’s news signal is +3.3 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 slightly up, but not enough to be significant.

 

Outlook 27 Aug '13: Mood turning Mixed; Market Down/Mixed

Today's market outlook is down/mixed.  The social mood signal has dropped from strong positive over the weekend to slightly positive.  The news signal has gone from slightly positive over the weekend to negative on Monday, continuing to be negative today.

Today’s social mood signal is +4.2 S&P points (with a negative momentum headwind).  Markets tend to follow social mood more often than not.  Social mood had been steadily pushing upward since mid-week last week, and markets had been following.  However, this upward climb has slowed, indicating a possible trend change in progress. 

after market update: actual S&P -26.3
 

Today’s news signal is -4.7 S&P points (with a positive momentum headwind).  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 appears to be extending in its downward turn. 

 

Near term outlook: The social mood pattern corresponds with aggression and instability.  Common news events associated with the current pattern are violence and geopolitical escalation.  Also, events that portray a theme of activity, heat and fires.  The social mood pattern tends to go with choppy markets, the mood pattern taken from the news tends to go with uncertainty and volatility.

end of day update-- some top news stories with today's themes:

US allies, Arabs demand action against Syria

Syrian army source: US attack on Syria would justify retaliation against Israel

Yosemite blaze sparks burning questions about fast-moving fires

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.

Aug 23, 2013 Outlook: Mood-"on Stand by"; Market- Up

Today's market outlook is positive.  Both the social mood signal and news signal are slightly positive.  Yet, the news signal is indicating that an event perceived as either "very good" or "very bad" is near.

Today’s social mood signal is +3.3 S&P points.  However, social mood has broken down below support over the last few days, and has not significantly turned up.  Bulls should be cautious as markets tend to follow social mood more often than not.

after market update: actual S&P +6.5
 

Today’s news signal is +1.2 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 the news signal remains flat, and the market continues to drop, tension builds.  A likely scenario is an upcoming news event that is perceived as either "really good," or "really bad."

 

Near term outlook: The social mood pattern corresponds with violence, over-exuberance, and disagreements.  Common news events associated with the current pattern are violent protests, terrorism, and geopolitical escalation.  Also, events that portray a theme of surprise, action, fires, and explosions.

end of day update-- some top news stories with today's themes:

Official: US military updating options for strikes on Syria

Northern Lebanon Rocked by Bomb Attacks

Flames from massive 'Rim' fire reach Yosemite

'Sovereign citizens' held in plot to kill Vegas cops 

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.

Aug 22, 2013 Outlook: Mood Confused, Market Down

Today's market outlook is negative.  Both the social mood signal and news signal are negative.  The news signal is indicating that an event perceived as either "very good" or "very bad" is near.

Today’s social mood signal is -9.2 S&P points, although mood momentum is positive.  Social mood has broken down below support.  Markets tend to follow social mood more often than not.

after market update: actual S&P +14.2
 theme of confusion in market: Nasdaq market paralyzed by 3-hour shutdown

 

Today’s news signal is -0.6 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 the news signal remains flat, and the market continues to drop, tension builds.  A likely scenario is an upcoming news event that is perceived as either "really good," or "really bad."

 

Near term outlook: The social mood pattern corresponds with violence and volatility, but appears to be is in transition.  Common news events associated with the current pattern are violent protests, terrorism, and geopolitical escalation.  Also, events that portray a theme of surprise, action, fires, and explosions.

 

end of day update-- some top news stories with today's themes (confusion theme apparent):

Pfc. Manning: I want to live as a woman

Obama's thick red line on Syria

"Joker Lips" Surgery in South Korea Creates Perma Smile

Wildfire near Yosemite National Park balloons; residents told to evacuate as ...

 

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.