Below are the stocks with the most bearish intensity (volume and scores) on Twitter for both the past week and past month.
Most Active Stocks on Twitter
Below are the stocks with the highest intensity (volume and scores) on Twitter for both the past week and past month.
Traders are Chasing and Nervous
For the past few months Twitter sentiment for the ETFs that track the Nasdaq 100 Index (QQQ) and the Russell 2000 Index (IWM) have been painting a pattern that shows indecision by traders. Each move up in price is met with high sentiment and each move down garners a lot of negative tweets. This is causing our smoothed Twitter sentiment indicator to mirror price. When sentiment mirrors price it shows us that traders are chasing. Their tweets are reacting to price rather than predicting it. Smoothed sentiment for QQQ and IWM are currently showing very wide swings from bullish to bearish. This uncertainty is not a normal condition for actively traded and tweeted stocks. Instead, as momentum builds for a stock, Twitter sentiment starts to trend with the stock in a well defined range. Traders show confidence in their positions with a majority of tweets confirming the trend. In up trends, down days don’t show large negative prints in daily sentiment which helps smoothed sentiment continue to rise (and confirm
Most Active Stocks on Twitter
Weekly and monthly charts of the stocks with the highest overall intensity scores on Twitter.
15 Most Bearish Stocks on Twitter
Weekly and Monthly charts of stocks with the most bearish intensity on Twitter.
Top 25 Most Active Intensity on Twitter
Above are the stocks with the highest intensity scores on Twitter over the last week. Below are the monthly numbers.
Top 25 Active Stocks on Twitter
The stocks in the chart above have the highest total Twitter Intensity scores. Below are the Monthly scores.
Twitter Sentiment for the Indexes
Before we get to the sentiment charts I wanted to make a note that it’s likely we’ll be making some changes in our portfolios tomorrow. However, at this point we don’t know if it will be raising more cash and adding hedges or if we’ll be adding more long exposure. Several of our core market health indicators are so close to a trigger point that any substantial move on Friday will drag them in the direction of the move. Our indicators aren’t often in a position where they’re this uncertain. I had to go back to January of 2007 and April of 2006 to find similar examples. Both of those times had us adding exposure on the long side for just a few more weeks then the market corrected abruptly. One other example was during the choppy market of 2004. This isn’t a prediction of the same pattern ahead, just an observation that uncertainty in our indicators usually translates to sloppy market performance. We’ll make a note on Twitter @DownsideHedge
IWM Needs to Consolidate
We posted last week that Twitter Sentiment for IWM was diverging from price and that small cap stocks would likely consolidate before moving a lot higher. As of the close yesterday, smoothed sentiment for IWM has now had a divergence from price and also broken the confirming uptrend line. This meets the Twitter sentiment trade setup requirements we’ve observed before. As we mentioned in that post, don’t trade these setups because we don’t have a large enough sample set to know if they’re valid or profitable. In addition, this setup is a trade against the intermediate and long term trend for IWM. Trades against the trend are much more likely to fail and they also have much higher risk than reward potential. What this signal is telling us is that IWM will most likely consolidate for a more than just a few days. This is because sentiment from traders has turned from a bullish bias to a bearish bias. Momentum stalled with the negative divergence, then it turned down with
QQQ and IWM vs. TLT
Today we want to highlight three charts that give a pretty good picture of the current conditions in the market. They are for the Nasdaq 100 (QQQ), The Russell 2000 (IWM), and Long Term Bonds (TLT). Since the first of December, Twitter Sentiment for QQQ has been painting a triangle pattern. During the same time period price is forming a megaphone. These two conditions together show some indecision for the Nasdaq 100 Index. We’re seeing slowing momentum in sentiment that could be pointing to a head and shoulders pattern forming (with the trend line we’ve drawn as the neckline). It’s still to early to tell which direction QQQ is going to break, but sentiment should give us a clue over the next few weeks as it reaches the apex of its triangle. IWM has a much stronger price pattern with sentiment confirming its current move. However, there is a short term divergence with price that suggests IWM needs to pause for a bit before going substantially higher. Small stocks aren’t
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