This  weeks’ #hash crash, shows the impact Twitter can have on financial markets. It also shows why event trading merits utmost caution. Last Wed. the AP Twitter account was hacked, issuing a bogus tweet about an attack on the White House. A brief panic ensued and the Dow dropped close to 150 points. As soon as it was discovered that the message was a hoax, the market immediately regained the loss. This all happened within the course of 2 minutes. Following this, we received a multitude of questions. Does this affect SentiTrade? Does it affect the SentiTrade models? Did SentiTrade detect the bogus tweet? The short answer is: Read more

Tags #crash - APPL - hash crash - Norwegian pension fund - obama - pump and dump - Twitter - white house

With investors returning to markets after hurricane Sandy, we see a hefty struggle between the bulls and the bears. On one hand, opportunities are found in construction related businesses working to repair hurricane damage. On the other hand, airlines, insurers and retailers are hurting because of cancelled trips, incoming damage claims and presumably less discretionary spending towards the holiday season. Read more

Tags bearish sentiment - bullish sentiment - construction - damage claims - discretionary spending - hurricane - sandy - sentiment indicator

On May 22nd we wrote a post on sentiment volatility, reporting on frequent and erratic mood swings in financial news publications. SentiTrade was detecting volatility levels that had not been seen since the Lehman crisis of 2008 and 2009(!). Immediately after our sentiment volatility index (V-SQ) broke the 100 level on May 24th, the Spanish bank, Bankia asked for it’s €19 billion bailout and the DAX lost over 5% the following days… Read more

Tags bailout - bankia - eurobonds - fical pact - financial news - grexit - Lehman comparison - sentiment analysis - spanish bank

Parallel to the market recovery, investor optimism has been become increasingly bullish the past few months. Of course, there is always a place for “positive thinking”, however, one shouldn’t lose track of reality: We’ve recently seen improving numbers from the US economy, worrying signs from China, a “worse than expected” situation in Europe and “unexpected troubles” in the mid-East that contribute to rising energy costs. Read more

Tags algo trading - market nervousness - market trend - positive thinking - sentiment volatility - system trading - worse than expected

In our previous post we discussed a trading strategy that anticipates a take profit scenario on Friday afternoons. This week we present a strategy that will help you position yourselves ahead of the Dow open. By using SentiTrade’s market psychology data, we calculate the statistical probability of a U.S. market up or down opening. Read more

Tags bull bear indicator - dominant trends - Investment choices - investment strategy - market trends - pattern recognition - system trading - trading strategy