Wednesday, July 2, 2008

Google Trends: Bull vs Bear relationships

Took a dip into the pool of Google trends and compared some bullish/bearish search phrases. King of the Hill was the search for "bull/bear market"; the signs are good for a bottom in the market based on historical performance:

Note the general disinterest in search for these terms for the recent bull market. Search spikes for "bear market" occurred on January 22nd and very close to March 11th; note the current spike

Going on regional dynamics; there is more bullish than bearish sentiment in India (contrarian bearish) while the reverse it true for the United States and to a lesser extent in Canada. Australia and the United Kingdom are in balance:

As for other search terms; bullish and bearish sentiment hadn't enough data. Stock upgrade and downgrade was similarly limited. A more general search for "upgrade" and "downgrade" generated substantial differences (although the terms carry many more meanings beyond stocks). There was a gradual decline in "upgrade" searches over the past 4 years while there was a corresponding increase in "downgrade" search (the increase was also found in the volume of news references to the term). However, there was little to suggest any extremes which could be associated with market reversals.

People are more "optimistic" than "pessimistic"; Indians showing the greatest optimism and the British the least (but at least still net optimistic - but perhaps not over the summer weather). There was an interesting spike in both search terms over the middle of last year:

Ecomonic searches have seen a sharp rise for "inflation" over the course of 2008 with the occasional bump for "stagflation". "Deflation" and "disinflation" barely registered. News volume has markedly increased for "inflation":

News search has seen steady declines in "terrorism" with "murder" trending down. From a psychological standpoint there was a sharp spike in "suicide" in 2005 which wasn't related to "terrorism". France and Belgium showed interesting skews towards "suicide" over "murder", with India having the highest "terrorism" search. "Murder" was a significant search term for the United States, Canada, Australia and the United Kingdom.

Finally, "real estate" doesn't look to have reached a bottom with the continued decline in buying real estate, although the drop in the selling of real estate (and therefore supply) will eventually have a positive affect on the real estate market. Housing has been low key in news since spikes in 2006/07 - another good sign for a bottom soon.

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, market alerts, and stock charts website