Despite recent short term gains in the domestic markets the broad financial conversation is still having a hard time finding something positive to talk about. Conversations covering important topics such as the S&P500, Dow Jones Industrial Average, Fiscal Cliff, State of Affairs and European Markets continue to fall more to the bears than the bulls. We are watching these key topics, among others, that show a clear representation of how the financial community is viewing the overall financial climate.
We are seeing stronger conversation volume backing negative topics while positive topics are garnering much less attention. In such negative conditions we have observed markets having a harder time holding on to gains and making meaningful positive moves much less likely.
We are monitoring these reports from our site: the Standard & Poors 500, Analysts, State of Affairs, US Dollar, Europe, Nasdaq, Dow Jones Industrial Average and Fiscal Cliff
Following the election the “Fiscal Cliff” conversation exploded and has been looming over the financial markets. We know this topic will continue to impact markets through the end of the year. As such, we have added access to this special report to all subscriptions starting at the Domestic level. Get access here
The image above displays the daily closing Price of the S&P500 with our findings about the “Fiscal Cliff” conversation. The circled section is the 3 days directly following the national election. Over Those days we saw a huge jump in Conversation Volume and a large drop in sentiment regarding this topic. During this period the broad domestic markets sold off quite significantly and continued to do so for nearly two weeks. Volume on this topic has continued to slide with sentiment returning to neutral levels, but it will be very important to keep an eye on how this conversation continues through the end of the year.
It is easy to tell that this issue is effecting the markets, but without insight like this it is very hard to understand when it is gaining or losing strength. Currently conversation volume concerning the Fiscal Cliff has trickled down to a very low level, but this conversation is far from over. We have added this report to our “Position Monitor” page so we can keep an eye on how this topic develops as we approach the end of the year.
If you are asking “Wait, what is this ‘Fiscal Cliff’ thing?” CNN Money did a good write up about it here.
Over the past two weeks the U.S. domestic markets have been getting pummeled by across the board selling and falling sentiment. During extended sell offs, like the one we are experiencing, it is important to understand “The Bounce” that typically occurs when a market gets over sold. In its simplest form this is buying that happens because a market has fallen “to far to fast”. These bounces can be good opportunities for educated traders and investors if they are able to identify the timing of when a market will “bounce” or correct.
The above image shows our Sentiment chart of the S&P500 over this period. From Nov. 7th until Nov. 13th we were in a negative and falling period for sentiment, but starting on the 14th the average weekly sentiment started climbing again. This was a strong indication that the atmosphere surrounding the S&P500 was starting to stabilize. As a result we saw the market put in a near term low and begin to move upward again.
This concept of “The Bounce” was covered by Jim Cramer last Friday regarding the positive move in Apple. He does a good job in explaining this concept and further confirms our previous post regarding AAPL’s current price. See the Video
I think that we can all agree that owning Apple has not be favorable lately. A year ago I heard several predictions that AAPL shares were going to hit 1k. I called bs. Now I am hearing predictions as low as $400. Again, I am going to call bs. Sure AAPL shares were overpriced and that glass has somewhat shattered, but the company still has some solid assets. Using Crowd Prospectus, we can see that the temper tantrum has died down and people are beginning to resume their Apple fan-boy status.
About two weeks ago, we set out to use the Crowd Prospectus data to run analytics on the 2012 Presidential Election. Our analytics was dedicated to the site Battle for the Market. The site is completely dedicated to presenting the head-to-head battle between the two candidates. Additionally, in knowing that our data focuses on the financial market, it was great to see the two candidates compared the Standard and Poor’s 500 Index. Furthermore, we thought it we be great to see if there was any correlation between President Obama and Governor Romney with the healthcare and energy sector, respectively. Today, election day, we see that Governor Romney is in the lead, which is not surprising considering our focus.
However, as of today, our daily sentiment indicates that President Obama has more positive sentiment than Governor Romney.
I think it is safe to say that this election is going to be a close one.
Over the past few days, I have been following American Express. With all the buzz around Hurricane Sandy, this is definitely one company that has been overlooked. Last week this stock got hammered, which appears to coincide with the market; however, after the initial shock, the sentiment for AXP went back up to being overwhelmingly positive.
Amidst all the market shakiness, this might not be a bad stock to add to your portfolio. The jury is still out for the long-term, but right now people are very excited about this company.
We built this site last night. Thought it would be a good idea to take the raw data that we had and apply it to world-wide issue that is on everyones mind. Of course we had to put a market twist on it.
In the past, there have been some academic studies looking into the correlation between candidates near the election date and the S&P 500. Hopefully we’ll be able to show a connection, especially for the health care and energy sector.