We can now add Starbucks (SBUX) and most likely Oracle (ORCL) to the list of stocks with warnings from Twitter sentiment. Take a look at the charts below and you’ll see that sentiment is waning in leading stocks across several sectors. These stocks need to reverse their short term down trends and negative sentiment or it will most likely have implications for the market as a whole. Take note that most of these signals are against the trend so we’re not predicting a change in trend. Instead, these signals warn that sentiment is slowing and the stocks may need a pause or a dip before investors and traders get more bullish. We are concerned however, about the number of stocks we’re seeing with warnings…especially since they’re coming from several sectors.
Just a quick note today about our core market health indicators and Twitter sentiment. Throughout the week our core indicators have weakened. Our measures of risk are the only ones that have held up. All of the other categories (economy, quality, trend, and strength) continue to slip downward. This is a bit discouraging considering the strong rally today. It appears to us that market participants lack conviction which is causing our indicators to decline even when the market rallies. If the market continues to rally over the next two days, but we don’t see better internal indications we’ll be raising cash again. Twitter sentiment turned up at the zero line today which is what we like to see on market declines. However, today’s strong price action barely moved the daily indicator above zero. It came in at roughly +4 which shows that traders on Twitter aren’t confirming the up move in price. This is the type of action we saw in mid February just before the market had several sharp
Above are the stocks with the highest intensity scores on Twitter over the last week. Below are the monthly numbers.
Above are the stocks with the most Bearish intensity on Twitter over the last week. Below are the monthly numbers.
Above are the stocks with the most Bullish Twitter Intensity over the past week. Below are the monthly numbers.
In our weekend updates I always reference our core market health indicators so I thought it would be helpful to create a chart to add some perspective. I’ll post a new chart at the end of each week so you can see how far above or below zero each indicator is. In addition, you’ll be able to compare each indicator from week to week to see which are falling and which are rising. By watching them each week I get a “feel” for the market that helps me understand the underlying influences. My hope is that it will help you too. For better comparison purposes I’ve normalized all of the indicator categories to a scale of 1 to 10. Currently our weakest set of indicators is our measures of the economy coming in at -7. Earlier this year we saw some strength and thought it was going to bottom, however that hope was short lived and the indicator has turned back down. It had reached -3 so this was a
I’m visiting with family so this week’s overview with be a short one. Over the past week our core market health indicators moved sideways. Some went up a little and some went down a little. None of them moved enough to change our portfolio allocations, however, over the next week the market must continue to show strength or we’ll most likely be raising more cash. We’ll mention any changes to our indicators on Twitter @DownsideHedge and post an update here before the market closes on Friday if we make any portfolio changes. Our Twitter Sentiment indicator for the S&P 500 Index (SPX) strengthened again over the last week. The daily indicator spent most of its time above zero printing moderately bullish numbers. This is encouraging considering the fact that the market is pushing up into old highs and an obvious resistance level. Many traders are tweeting about shorting the old highs between 1565 and 1576 on SPX, but their tweets are being outnumbered by others suggesting that the market will
The stocks in the chart above have the highest total Twitter Intensity scores. Below are the Monthly scores.
The stocks in the chart above have the highest Bearish intensity scores on Twitter over the last week. Below are the Monthly scores.