Emergence of artificial intelligence and ability to process massive datasets has enabled us to benefit from the news. We can develop tools which analyze news, social media and user-generated content in real-time and decide for themselves if the market mood is positive or negative.
There are several points where markets mood shift and trading opportunities exist. With such tool, you can have a very good idea on future events like:
- When a long-term bull market is entering a trend reversal
- When a market is about to rally if it is already in downtrend or sideways
With this extremely helpful data, you can time your entry or exit in markets. This is better than most of the technical indicators because unlike them it is not time-lagged. Other indicators compile on historical price moves which have already occurred, but this tool runs independent of price moves of past.
How it works?
We analyze several big publicly available websites to determine the social mood of the specific market. This data is then represented in the chart, and the same process runs every day automatically.
A test run on NSE (National stock exchange on India) is shown below:
Investors would have benefited in several ways from these signals:
- Avoided great crash of 2008 in Indian and global markets.
- Made profit from strong bull market of 2009, signaled around May 2009.
- Stayed out of sideways market from July 2009 – July 2010.
- Profit from a slight bull market from July 2010 – Dec 2010.
- Stayed out of market in slight downtrend of 2011.
- Profited again from bullish market starting around July 2012 which continued till Jan 2013.