#44: Market scentiment
There is a lot of effort currently being expended by organisations convinced that they can detect ‘market sentiment‘ by automated analysis of eg blog language.
My approach would be different. One way to detect whether it’s a good day to buy or sell hard is to sniff the traders themselves.
Since we know that various animals are fully capable of reacting reliably to various emotional states within people by the smell they give off, why not take Rover for a walk on the floor of the NYSE? Obviously it’s not quite as simple as that, since some heavy would no doubt throw even a blind person and their guidedog out on the street (not to mention that the visitors’ gallery looks to me as if it’s hermetically sealed from the trading floor itself -probably to stop mischevious entrepreneurs from injecting nitrous oxide).
Inspired by the story of the Newtonian Casino, I’d suggest training an artifical nose, carried covertly in the pocket of a trader. This could be allowed to sniff the odour within the trading room on a large number of occasions and its neural network trained to recognise which days would have been bullish or bearish. This would then allow anticipation of a forthcoming crash or surge in time to buy or sell.
Canny traders, please contact me for more info.