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Google Trends: Stock Market Sentiment

July 01, 2009 at 8:58 pm | Trade Artist | Comments 0
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I’ve used Google Trends many times to gauge the demand for products in my industry but the Trader’s Narrative blog had a fascinating post today about using the service to track market sentiment. Searches for ‘Stock Market Crash’ align pretty well with market lows and when the searches dry up there is a good chance we are seeing more complacency in the market before a decline.

Google Trends: Stock Market Sentiment

Here’s an interesting way to measure the general mood of the public towards the stock market: look at the frequency and trend of searching for related keywords. For example, “bull market” or “bear market”. Although not everyone knows that nomenclature. How about “stock market crash”? Everyone knows what that means.

Thanks to a new service from Google (GOOG) called Google Trends we can look at the popularity of various searches over time and even across different geographic areas. Persevering readers might remember that we first looked at this new measure of sentiment back in January 2008: Hunting For Sentiment Data.

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