Dan Aloni (![[info]](http://l-stat.livejournal.com/img/userinfo.gif){kind=small} da_x) wrote,@ 2008-03-18 23:38:00 |
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Google Trends and the stock market
For a long time, I was wondering if Google Trends can be used to predict the behaviour of large groups with respect to the stock market. Let's see if it could have been useful in predicting the stock market crash of January 2008.
Here is the graph of the Dow Jones in the last 12 months:
And here is the Google Trends output:
Notice that just before January, there are a few days where the amount of news article regarding "recession" dramatically increase. Just a few days later, the Dow Jones dropped hysterically. You can argue that the correlation is accidental and is not reliable for future trials to "time the market", but for me this connection is too obvious to ignore.
For a long time, I was wondering if Google Trends can be used to predict the behaviour of large groups with respect to the stock market. Let's see if it could have been useful in predicting the stock market crash of January 2008.
Here is the graph of the Dow Jones in the last 12 months:
And here is the Google Trends output:
Notice that just before January, there are a few days where the amount of news article regarding "recession" dramatically increase. Just a few days later, the Dow Jones dropped hysterically. You can argue that the correlation is accidental and is not reliable for future trials to "time the market", but for me this connection is too obvious to ignore.
