Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Can Stock Market Mood Analysis Also Predict Social Turbulence?

Stock-Markets / Stock Market 2017 Oct 05, 2017 - 08:19 AM GMT

By: Avi_Gilburt

Stock-Markets

Many of you have noted through the years that you simply do not understand how our analysis methodology works. Yes, it can be more complex than most other forms of analysis, but it is also often more reliable and accurate in identifying targets and trends. As an example, where we have used it at the end of 2015 to call for a drop in the market from the 2100 region down to the 1800 region, to set up a rally to the 2500 region. Yet, many still view it as a form of “voodoo.”


But, what we are doing is attempting to analyze market sentiment, as presented by the manner in which the way the stock market acts. And, the benefits of understanding the broader trend utilizing this methodology has greater implications than simple profitability through trading and investing.

You see, studies have been done about when the overall mood of society is ripe for war or peace. It does not necessarily mean that a large-scale war will certainly break out, but it does give you warning that the environment is one in which war has become more likely. Remember, we are unable to tell the future, but are able to understand what the implications of social mood may mean to society as a whole.

Along those lines, over the last few years, I have gotten to know Dr. Cari Bourette of MarketMood.net. Dr. Bourette has been studying the overall impact of market mood upon society and the stock market for many years. In fact, she has built an algorithm which is able to identify not only turning points in the markets based upon this algorithm, but also to identify potential effects of mood upon society.

Eerily, her weekend update posted this past Saturday morning (September 30) was entitled “Terrorist Alert Through October 12, 2017.” Moreover, her expectation was that an attack can occur near Denver, Colorado:

“While this does not imply that we are certain that a terrorist attack will occur in the Denver area by October 12, it does mean that during a period where increased terrorist activity is likely, that the highest probability for such an event to occur within the U.S. is near Denver, Colorado.”

We all know what happened in Las Vegas the very next day, a sickening, horrific attack.

Dr. Bourette's mood forecasts are based on an analysis Internet search trends, using research spanning two decades. To understand more about how she arrived at her uncanny forecast last Saturday, I'll point you to her article here.

Whether or not the tragedy in Las Vegas was what her analysis was pointing to -- and let's hope and pray that there is nothing more -- it does raise the question of whether analyzing social mood can help us predict more than just the stock market. As further study is done into the effect of mass sentiment, I think there are many more aspects of life for which this study can prepare us.

As for how social mood and sentiment analysis can produce relatively accurate predictions regarding the stock market, I hope you have seen evidence of this in our analysis over the years. Further evidence is presented when you look at the impact of news and exogenous events on the markets.

Market expectations

Amazingly, there has been no exogenous event over the last year and a half which has had any effect upon the market trend. Sadly, the market has struck further all-time highs even after the horrific events witnessed in Las Vegas.

As I have noted time and again, exogenous events do not effect market direction until the market sentiment patterns have run their course. And, we can sadly add this event to the list of exogenous events which have not stopped this trend at all over the last year and a half, in addition to the Spanish referendum unrest seen at the same time:

Brexit – NOPE

Frexit – NOPE

Grexit - NOPE

Italian referendum - NOPE

Rise in interest rates - NOPE

Cessation of QE - NOPE

Terrorist attacks - NOPE

Crimea – NOPE

Trump – NOPE

Market not trading on fundamentals – NOPE

Low volatility – NOPE

Record high margin debt – NOPE

Hindenburg omens - NOPE

Syrian missile attack - NOPE

North Korea – NOPE

Record hurricane damage in Houston, Florida, and Puerto Rico

Spanish referendum – NOPE

Las Vegas attack - NOPE

The overall market structure still suggests that as long as the SPX remains over 2487-2496 support, we can subdivide to the 2575SPX+ region by Thanksgiving before this wave (3) tops and provides us another pullback to the 2350-2400SPX region. However, if the market should break that upper support on the coming test of support, that provides initial warning that wave (3) has topped as an ending diagonal. For now, the bulls remain in charge, and negative exogenous events will continue to have no effect upon the market until this wave (3) pattern off the February 2016 lows has completed.

Prayers

Please join me in praying for those who lost their life in the horrific Las Vegas attack, along with those who were injured, and for those whose lives have been forever changed.

Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.elliottwavetrader.net), a live Trading Room featuring his intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.

© 2017 Copyright Avi Gilburt - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in