Social Sentiment Indicator: Try this stock market indicator... Looking at the Markets with David Moadel
welcome to looking at the markets with David Modell here's an indicator that
you might not be all that aware of or maybe you heard about it and they're
different ways to interpret it and I want to tell you about it today it is
the social sentiment indicator sentiment means how people or investors generally
are feeling about stocks and the stock market they might feel bullish or
confident they might feel bearish or negative or they may be just kind of
neutral now how you use social sentiment is you would look not just at sentiment
but also probably you're looking at sentiment on social media such as
Twitter and other similar places like that so I'm going to give you a couple
websites that you can use and I'm going to put all the links to these websites
in the description below this video to make it easier for you the first one I'm
looking at right now is from The Wall Street Journal and it is the u.s. social
sentiment index what they've done is they've measured millions of Twitter
messages they've measured the sentiment every hour of millions of Twitter
messages are they positive on stocks are they negative are they bullish are they
bearish and it's kind of interesting and so for example right now if 100 is just
neutral or just the average sentiment on Twitter on the tweets
generally speaking right now it's 91 so they're rather negative if it were let's
say 110 or more it would be more positive
now how you use this is up to you I'm more of a contrarian and so I would tend
to want to buy stocks more if there's a very negative social sentiment and I
might decide to sell my sell some of my stocks if I feel that there is too much
positive sentiment but you can go the other way around as well if you want to
be more bearish if there's a bearish sentiment and be more bullish if there's
a bullish sentiment you can do it that way as well you don't have to be a
contrarian how you use this indicator is up to you but I'm just telling you how I
use it I have a tendency to do the opposite of most people that's
just how I am and also if you think about it
90% of retail traders fail at it and so if most people are not so good at
picking stocks correctly then why would I want to do what most people are doing
I probably would want to do the opposite a lot of the time so here's another one
and this one is the fear and greed index and it's from CNN and again I'll put
these links in the description below this video and instead of using negative
and positive or bearish and bullish they use fear and greed to measure what
emotion is driving the markets right now and right now it's more toward the greed
side of things according to this indicator personally I would be more
likely to buy if it were closer to fear but how you use this is up to you but I
think it's pretty cool that we have these indicators and this is interesting
it's an ETF some people say there's an ETF for almost everything and that's
kind of true there's actually a sentiment indicus nth of an indicator
but a sentiment ETF it's called the buzz us sentiment leaders ETF the stock
ticker on the net on the New York Stock Exchange is BU Z and let's see the
description here this is from Yahoo Finance it says that it is designed to
identify the u.s. common stocks with the most positive insights collected from
social media networks not sure which ones exactly but I'm going to guess
Twitter might have something to do with it who knows what else besides that
but if the if there are very positive insights collected from social media
networks then those are the stocks that they might choose to invest in so what
do you do if you're contrary and would you short this I don't think I would
short it necessarily just because I'm a contrarian but it is interesting maybe
to watch this ETF and see which way it's moving just as a gauge a possible other
gauge or indicator of the general social or social
Media sentiment for stocks all right and I just want to show you one other
thing if you want another indicator of social media sentiment I recommend
signing up for stock twits they're not paying me to say this it's just because
I'm a member of stock twits I have 51 thousand followers on stock twits and I
do enjoy using stock twits dot-com it's similar to Twitter except it's more
focused on stocks and it's a pretty good way actually I've found to gauge or
measure sentiment on either the market as a whole or on a particular stock if
you type in a particular stock into the search box on stock twits what you'll
notice is that whenever a stock goes down you'll see a lot of these bearish
red bearish signs flashing whereas if a stock goes up you'll see a lot of green
bullish signs flashing so I guess there are not a lot of contrarians out there
but that's that's normal that's how sentiment usually works so if I see a
lot of bearish signs on a particular stock at least know that sentiment may
be more negative on that particular stock and if I see a lot of green
bullish signs then sentiment may generally be more bullish or positive on
that particular stock all right so I hope this was helpful to you I hope it
gave you a new perspective and a new way of looking at things whether your
contrary nor whether you want to just go with the flow it's up to you so if you
found this helpful if you found this video helpful to you please give it a
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continue to provide you with updates on my latest educational videos and if you
would like some help putting together a trading or investing plan I can help you
do that you can email me anytime at David Modell at gmail.com I'm also
offering a subscription service for stock alerts or signals and you can ask
me about that as well thank you so much I really
appreciate it and I'll talk to you again soon
you