stock market Tagged ‘stock market’

Number of Verbs & Nouns As Indicators of Stock Market Trends?

Tuesday, July 19th, 2011

Fewer Verbs and Nouns in Financial Reporting Could Predict Stock Market Bubble, Study Shows

ScienceDaily (July 19, 2011) — When the language used by financial analysts and reporters becomes increasingly similar the stock market may be overheated, say scientists.

After examining 18,000 online articles published by the Financial Times, The New York Times, and the BBC, computer scientists have discovered that the verbs and nouns used by financial commentators converge in a ‘herd-like’ fashion in the lead up to a stock market bubble. Immediately afterwards, the language disperses.

The findings presented at the International Joint Conference on Artificial Intelligence, Barcelona, Spain, on July 19, 2011, show that the trends in the use of words by financial journalists correlate closely with changes in the leading stock indices.

“Our analysis shows that trends in the use of words by financial journalists correlate closely with changes in the leading stock indices — the DJI, the NIKKEI-225, and FTSE-100,” says Professor Mark Keane, Chair of Computer Science in University College Dublin, who was involved in the research.

to read more, go to:    http://www.sciencedaily.com/releases/2011/07/110718101202.htm

Problems with the Dow

Tuesday, July 5th, 2011

Why the Dow will end up plunging to 7,000

There are too many financial risks on the horizon that are being dismissed

By Douglas A. McIntyre
24/7 Wall St.
One theory of economics says that any market can return to a point where it has been in the past. The Great Recession was, by some measures as bad as the Great Depression. Unemployment was 3.6 percent in November 1966. It was at 4 percent in December 1999. There is no precedent for zero unemployment, but those two periods came close.

Recent movements in the stock market could repeat themselves as the economy lurches toward another recession. The DJIA fell to just below 6,630 on March 2, 2009. Back in October 2007, 17 months earlier, it briefly traded above 14,000. What happened? The most frequent answer is the recession that lasted from December 2007 until June 2009, a period determined by the National Bureau of Economic Research, caused the collapse. The recession lasted 18 months, which made it the longest of any downturn since World War II.

The DJIA could drop below 7,000 again before the middle of next year, down from 12,000 where it trades now. The market fell over 50 percent last 2008 and 2009. A correction to 7,000 this time would be 42 percent.

to read more, go to: http://www.msnbc.msn.com/id/43564461/ns/business-stocks_and_economy/