Moving onward: Mood and Market Aug 23-29, 2015

There is a growing desire to move beyond the serious mood of the past week as this week moves forward.  However, there may still be some serious news very early in the week as the mood factors from last week (background of violent or volatile news and serious tone) reach their climax.

Market dropped sharply last week, 6.7% from Wednesday through Friday.  As of Saturday, social mood shows that markets are currently 3% oversold.  That is, they are 3% below where social mood would place them.  Markets could be confused as they shift direction early in the week, but a large 3% bounce would not be surprising as the desire to move beyond last week's big losses takes hold.

 

Volatility! : Outlook 28 February '14

Overview:  Collective mood indicates high risk of violence and increasing uncertainty globally.  A major crisis directly impacting the U.S. people and government is immanent.  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: -16.3 from Google Hot Trends, -0.8 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.

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. 

News and Markets turning Sour: Outlook 11 Sept '13

after market update: actual S&P +5.09 (0.3%) Markets struggled entire session, down or sideways for much of it.  "Eek out" was a great description of today's action.

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Overview: Today's mood and news signal show a sense of continued positive developments.  However, signal momentum indicates the upside is losing steam, and a reversal is near (not necessarily today).  Markets could eek out another 7-10 points today, but if so, it should be a struggle to hold such gains through day's end.

 

Near term outlook: The social mood pattern corresponds with volatility and violence. 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 up, but may be losing steam.  A reversal is near.  

Today's Market Outlook is Up, but with increased risk of trend reversal.  Both the social mood signal and news signal are moderately positive as of the time of this posting.  However, both social mood and news signal momentum indicate an increased risk of trend reversal.

Today’s social mood signal is +11.5 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 +13.6 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 of the time of this publication, the news signal is up, but news signal momentum indicates a trend change is near.  The huge divergence between news level and the stock market actuals indicate that extremely positive or extremely negative news could be very near.

 

Violent Mood, Bad News, and Market Rally?: Outlook 9 Sept. '13

after market update: actual S&P +16.54.  The market did rally 1%!

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Overview: Today's mood and news signals reflect a very large shift in social mood and the news, as well as signaling a huge rally.  However, with such a large change, one might expect volatility, confusion, and choppiness, rather than the indicated 1-2% rally.  We'll see what happens.

 

Near term outlook: The social mood pattern corresponds with directed violence, volatility,  geopolitical escalation, and troop movement. Common news events associated with the current pattern are related to vulnerability and economic contraction.  Natural events associated with this pattern are fires and volcanoes.

Longer term outlook: The social mood signal trend may be turning up; today's events and responses may be critical to the longer trend.

Today's Market Outlook is Up, but capable of sharp reversal.  Both the social mood signal and news signal are strongly positive as of the time of this posting.  However, because the social mood reflects volatility, a sharp reversal is possible.

Today’s social mood signal is +13.8 S&P points (+47.6 S&P points for the entire weekend's signal, Saturday thru today).  Markets tend to follow social mood more often than not.

  

 

Today’s news signal is +17.3 S&P points (+19.5 S&P points for the entire weekend's signal, Saturday to today).   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 up.  Yet, the huge divergence between news level and the stock market actuals indicate that extremely positive or extremely negative news could be very near.

 

Outlook 30 Aug 2013: Preparing for Violence; Ready for a Shift

Near term outlook: The social mood pattern corresponds with rising passions.  Common news events associated with the current pattern are terrorist activity, and extreme polarization (e.g. us vs. them, "good guys" vs. "bad guys).  Also, events that portray a theme of instability, volatility, 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 again slightly Up to turning Down.  Once again, 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 -5.2.

Today’s social mood signal is +2.9 S&P points.  Markets tend to follow social mood more often than not. However, even with a slightly positive signal, bulls should be cautious as the social mood signal is near resistance, meaning collective mood or outlook is hitting a ceiling as far as hope and optimism is concerned.
  

 

Today’s news signal is +5.3 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.  As of the time of this publication, the news signal is slightly up. 

 

Outlook: Violent and Volatile Mood continues

Collective Mood for August 24, 2013 shows continued global risk of escalating violence and instability.  People may be feeling aggressive, agitated and/or energized and are more prone to take action than usual.  The risk for government initiated violence is high.

News events corresponding with the current social mood: Angry or violent protests, terrorist activity, and geopolitical escalation; also, earthquakes, heat, fires, and explosions.

A shift in mood is currently in process.  Global scale actions over the next few days may facilitate the completion of this shift.

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

5 shot, 3 dead in Lake Butler mass shooting

Wildfire enters Yosemite, threatens San Francisco water, power

Fire At SI Home Endangers Lives Of More Than 60 Animals

 

Global Weekend News:

US Sets Stage for Bigger Syria Role

Syria lets UN inspect gas attack site, Washington says too late

America ready to take action against Syria as Iran warns of 'harsh consequences'

 

Aug 19, 2013 Outlook: Mood Volatile and Market Down

Today's market outlook is negative.  Both social mood and the news signals indicate a downward day is most likely.

Today’s social mood signal is -5.1 S&P points (entire weekend signal, Sat thru today: -6.6).  Social mood continues to slowly, but surely be breaking down below support.  Markets tend to follow social mood more often than not.

after market update: actual S&P -9.8

 



Today’s news signal is -3.1 S&P points

(entire weekend signal, Sat thru today: +8.3).  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 we’re currently in an inverted news cycle, today’s news may be perceived as slightly positive (yet bad for markets), although the overall weekend news would appear moderately negative (yet good for markets).

Near term outlook:
The social mood patterns correspond with violence and volatility.  Common news events associated with current patterns 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:

10000-gallon tank explodes at Pa. plant; 1 dead
Beaver Creek Blaze in Idaho shows no signs of slowing down
Strong winds fan fire along Columbia River
Dick Van Dyke rescued from burning car
Meet Sunny, the new dog adopted by the Obamas (the dog's name, Sunny, is "fiery")

 

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

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.