MarketMood Wednesday: Disaster Approaching

Where We've Been: 

Tuesday's mood pattern implied the beginning of a 1-3 day "new bearish chapter," yet MMI gave the odds to the upside for the day.  Once again, a choppy or whipsaw kind of trading day was considered likely.  The market gapped down, moved up strongly, then lingered sideways.

MMI for Tuesday was: close up; S&P 500 closed +0.37%.

Where We're Heading:

Wednesday's mood pattern reflects a "calm before the storm" or "crickets" and Thursday's a crisis or disaster.  MMI is pointing down both days.  Usually the "calm before the storm" reflects the eerie quiet before something unknown, and the crisis or disaster is unexpected.  In this case, there is a literal potentially catastrophic storm expected to impact the East Coast late Thursday and into the weekend.  Is this the disaster reflected in the mood pattern or is there something more global on a parallel track?  Will the market still go down in conjunction with a known and expected event?  That doesn't seem likely, but this disaster approaching and impacting outlook is what sentiment is reflecting and what the MMI calculation is based on for the next two days.

MMI for Wednesday: close down

Dr. Cari Bourette is an analyst at ElliottWaveTrader.net, where she provides her proprietary market mood analysis in our flagship service, "Avi's Market Alerts."