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Collective Mood shows that a spike in global violence and volatility in the near term is a good possibility (yes, more than we've already been seeing).  Fires, explosions, activity, and instability, are all candidates associated with the current global mood.  All this could translate into some crazy stock market moves in the week ahead as traders try to sort out what it all means.  The potential effects of this week on the average citizen may not be clear for another week or two.

Social Mood and the Stock Market (see Google Hot Trends chart below): Divergence between social mood and the stock market has lessened somewhat due to last week's market decline.  Yet, the market would still need to drop over 9% to be back where social mood indicates it “should” be.  Social mood has been slowly continuing to work its way down through support levels, but without a decisive breakdown.  While the big picture bias for the market is down, momentum indicators show a short term bounce is near.  This adds to the uncertainty for the week ahead.


U.S. News and the Stock Market (see U.S. news chart below): U.S. news signals have been indicating an approaching rally, yet the markets have so far not played along.  U.S. news signals tend to follow along with the general market trend, but may lead or lag the movement of the market.


The "week ahead" social mood chart (below) shows a negative momentum going into the week, with a trend change during the week a good possibility.  In the longer term outlook, this chart shows the stock market to be about 12% above where social mood indicates that it "should" be.


Update 8/25/2013: 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.

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