The S&P 500 closed virtually unchanged today (7/30/20120), however, our Twitter Sentiment Indicator for the S&P 500 index fell sharply. The last time this happened was on 7/5/2012. The next morning the June jobs report was released which caused the market to fall for the next several days. What will tomorrow bring? Just an update on 7/31. The sentiment indicator is even lower this morning at -.33 which is where it was at the first of June when the market was making new lows and after a few weeks of intense selling. Meanwhile the market is waiting for tomorrow’s Fed statement. Is sentiment anticipating a lack of a QE3 announcement at 2:15?
Sentiment on Twitter is tanking after the poor earnings report. Look at the before and after pictures (below). One important thing to watch over the coming days is whether market participants treat the bad earnings report as AAPL specific or as signs of a weakening economy. I’m hearing a lot of chatter about the slow iPhone sales being a result of people waiting for the iPhone 5. Watch the other device makers who don’t have the same product release schedule in the near future to get some clues about the economy.
The Downside Hedge Twitter Sentiment Indicator for the S&P 500 continues to paint a triangle pattern showing uncertainty in the market. As the market moves higher twitter sentiment is compressing and showing a negative divergence with price. It continues to stay below zero which is net negative for market prospects going forward. On the positive side sentiment rose today even as the market sold off hard.