Blog Traffic as a Contrary Market Indicator
Hey folks, I have to let you know about a new trading tool I have.
That bullish reversal call on CNBC on January 23rd? In addition to the other indicators I track, I have another "special" sentiment reading. Its become my secret weapon.
What is it?
You.
As a group, it seems that traffic to blogsites can be tracked as a contrary indicators -- especially when the market is under pressure.
Note that the selloff in August, and then the more recent whackage in January, each created a major traffic spike -- which led to a bottom, and a healthy bounce.
Sitemeter traffic to TBP as of January 30, 2008
>
Now, maybe the content here suddenly got much better. It could be that I suddenly became a whole lot more insightful, or perhaps my prose more poetic -- but I doubt it.
What most likely occurred was the market turmoil generated an influx of new visitors.
Monday, February 04, 2008 | 08:30 AM | Permalink
| Comments (60)
| TrackBack (0)
add to de.li.cious | 
digg this! | 
add to technorati | 
email this post
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef00e5501af4528834
Listed below are links to weblogs that reference Blog Traffic as a Contrary Market Indicator:
Comments
Let us know when it happens again..I will put some $$$ to work.
Posted by: Lew Dunbar | Feb 4, 2008 8:39:30 AM
I've updated my post and charts: (http://benbittrolff.blogspot.com/2008/02/fed-changes-really-scary-fed-charts.html)
Fed CHANGES Really Scary Fed Charts
Removing TAF makes a significant difference.
$50 billion to be exact.
TAF operations are ongoing. So this discrepancy would just continue to grow.
LIBOR is also starting to misbehave, again. Nothing too serious yet (not like before Christmas) but you get my drift. Stress is creepying back into the system.
The (counter trend) rally in risky assets should just about be over, if I've interpreted this correctly.
TheFinancialNinja
Posted by: Ben Bittrolff | Feb 4, 2008 8:45:37 AM
yes i've known for a while that i'm a great contrary indicator. if you'd like to help subsidize my losses i can email you whenever i "have a hunch" about the market.
Posted by: humanface | Feb 4, 2008 8:54:23 AM
Are you implying that we're sheeple?
....baaaaaa!.....baaaaaaa!....
Posted by: Eclectic | Feb 4, 2008 8:56:41 AM
Seems straightforward enough: when the economic news is interesting, economic blogs get more hits. Those with more market exposure than myself (full disclosure: everyone) would probably find the word "interesting" insufficient....
Posted by: biff3000 | Feb 4, 2008 9:02:40 AM
Turmoil and uncertainty begs direction, or at least confirmation.
Posted by: Lars | Feb 4, 2008 9:04:21 AM
This blog has become a crucible for meaningful intelligent ideas about the state of the economy and the direction of the market. The financial media, you Barry, the readers that post comments; they all feed each other. You don't get this anywhere else. Even Ben reads you and for all you know, he might even contribute comments. What do you think: what nickname does Ben use?
Posted by: Steelduck | Feb 4, 2008 9:25:09 AM
The stock market is rising again, and will probably continue to do so until, maybe, May and S&P 1500. Then we will get another nice dip to maybe S&P 1380. Then back up. This is going to be a profitable year for someone who trades the big ranges. And an OK year for buy and holders who don't panic and sell at the bottom. My crystal ball can't see the end of the year yet.
Astute sector buyers still have 15% - 20% in upside available if they move quickly. Europe, value, tech are still in the craphole, but rapidly climbing out. Even Japan might be ok. The yen is weakening again. But beware, as someone once told me, the laws of economics don't apply in Japan in the same way they do elsewhere.
The Fed did it's part. I am now doing mine by converting Wealth from recent market gains into Consumption. Lower rates will bring house buyers back into the market and their effects will start to become obvious later this summer. The market will dip around S&P 1500 because that level is just a little too high, at this time, to be sustainable.
BTW, I just read your piece about Ben Stein. Is he really that out of touch? I had no idea.
Posted by: cinefoz | Feb 4, 2008 9:27:11 AM
Doug Henwood of Left Business Observer, and a commentator on WBAI, makes a similar observation. He says reporters finally solicit his views on the economy when it seems direst, just before a recovery.
I don't say it is a buy signal, just that the secret, unavowed fear of Wall St honchos is that Marx was right.
Posted by: John | Feb 4, 2008 9:28:53 AM
Barry, I like your blog as a corrective to wild short term optimism, and I enjoy the intellectual battle I have with some of your pessimistic readers.
I also think there are enormous opportunties today that won't come around again for a few years. I have bought into a bunch of financial stocks because I think they are oversold, but I have hedged by marrying them with puts.
If some of the bank stocks hold over this period, I will have not only nice gains, but very juicy dividends.
Posted by: Karl K | Feb 4, 2008 9:37:06 AM
Oh, Barry, Bespoke notes another indicator -- the cover of Business week.
http://bespokeinvest.typepad.com/bespoke/2008/02/magazine-cover.html
Posted by: Karl K | Feb 4, 2008 9:40:40 AM
Um, not at the open . . .
Posted by: Scott | Feb 4, 2008 9:44:38 AM
I'm much more interested in the Boston Herald blog today. The financial blogs are great, but are no match when it comes to evoking uproarious laughter.
Posted by: The Dirty Mac | Feb 4, 2008 9:56:44 AM
Barry,
Dr. Brett at TraderFeed commented about his spike in traffic in January as well. The pattern makes perfectly logical sense: Investors look for answers as uncertainty and volatility increases, especially on the downside. Fear manifests itself in the herd much faster than any other emotion associated with investing.
I suspect the spikes in traffic at your blog would correlate best with troughs than peaks.
Thanks for the insight, as usual...
Posted by: The Financial Philosopher | Feb 4, 2008 9:58:14 AM
I come here every day... but when things are wild on wall street I tend to "drop by" more often.
Not an active trader, am retired and what we have is in pretty conservative vehicles. Still, I now have time to pay attention to what is going on.
Posted by: JWC | Feb 4, 2008 10:13:17 AM
I covered media stocks as a buy sider through the 2001 recession.
CNBC and bloomberg saw a large initial spike in viewers in the first months of the stock market decline.
However, as it continued to grind lower and the news and the averages got worse and worse people just turned off their sets because it was so depressing.
It would make sense that you would see a large spikes in viewers durning inflection points in the market.
Posted by: Vermont Trader.. | Feb 4, 2008 10:15:41 AM
>>My crystal ball can't see the end of the year yet.>>
But yet you still are in denial about interest rates and have made the following statement as well:
>>Lower rates will bring house buyers back into the market and their effects will start to become obvious later this summer. >>
This is really simple RATES ARE NOT LOWER
GO look for yourself. Myself as well as many others have pointed this out to you SEVERAL TIMES.
You are what is wrong with the market...people that have no idea what is going on around them yet seem to profit regardless of how clueless about the original environment they are.
You say you have no crystal ball yet have made two predictions based on wrong assumptions about interest rates.
You and your money will soon be parted. I have no doubt about that.
Ciao
MS
Posted by: michael schumacher | Feb 4, 2008 10:20:13 AM
IMO, merely a coincident indicator of market distress as participants seek out answers to allay their concerns.
Posted by: Stuart | Feb 4, 2008 10:21:36 AM
I think the comments could be an indicator too. Look at most of the comments from the days we hit our lows. Looked like the world was coming to an end.
Posted by: bruce | Feb 4, 2008 10:34:21 AM
The world may still be coming to an end! Something to consider:
http://market-ticker.denninger.net/
Posted by: karen | Feb 4, 2008 10:36:49 AM
This is probably a good thread to throw in a quote that hits on two of The Big Picture's favorite topics - contrary market indicators, and Larry Kudlow:
====================
12/05 04:04 PM
The Recession Debate Is Over
Larry Kudlow
There ain’t no recession.
Today’s ADP private jobs survey of 189,000 could produce a 200,000 non-farm payroll job gain for November. I don’t know — these wacky BLS numbers are subject to huge revisions. But the ADP was a huge number. In fact, jobs seem to be picking up major steam from their August low, rising in September and October. And now I’m expecting a good increase in November to be reported by the BLS this Friday.
Plus, profits are stronger than people seem to understand. The ISMs are fine. Productivity, reported out today, soared to over 6 percent annually in the third quarter. That’s the best number in four months for output per person.
On top of that, business inflation is zero. Flat. Nada.
The recession debate is over. It’s not gonna happen. Time to move on.
At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). The Bush boom is alive and well. It’s finishing up its sixth splendid year with many more years to come.
=================
Boy Howdy!
Posted by: E | Feb 4, 2008 10:39:08 AM
When someone says they're from the Center for XXX XXX, what are they talking about? How do they get their money to pay salaries? Could I call myself the Cinefoz Institute and allow myself to be quoted as an authoritative source? Are many "Institutes" just euphemisms?
Prognostication: Today will be ok, but the stock market is uncertain at the micro level at this moment. Buy my newsletter and I will offer authentic forecasts.
Cinefoz Institute
Posted by: cinefoz | Feb 4, 2008 10:50:53 AM
As a new reader maybe I should explain myself? I am a blog reader, using bloglines, and currently have 60 tracked feeds. The buckets I use are: Economy, Energy, Environment, Science, General.
I've been an energy/environment reader primarily, but I've had an Econbrowser and a Marginal Revolution feed for years. I picked up Calculated Risk and The Mess That Greenspan Made ... maybe last summer.
I am a pessimist about this situation, but I think the reason I've been branching out, and picking up more Economy feeds (now 13) is that I think "something's happening."
Might that be a root of the traffic, rather than a positive/negative indicator? It might indicate a junction ... what that junction proves to be is of course the question that keeps us reading.
Posted by: odograph | Feb 4, 2008 11:05:14 AM
MS
you follow FOMC operation fairly closely, the Denninger link provided by Karen, any comment on his assessment of the situation.
Posted by: Stormrunner | Feb 4, 2008 11:06:48 AM
cinefoz-
You mock predictive powers yet made two "predictions" using flawed understanding about interest rates. AGAIN... RATES ARE NOT LOWER....understand that.....
You are wrong about interest rates
But continue to make fun of others when you have no idea that the basis of your "position" is so backwards you can't even understand basic rate calculations (or have no clue where to look for them)
Good luck with that.
Ciao
MS
Posted by: michael schumacher | Feb 4, 2008 11:10:55 AM
