…and the Blogger Sentiment Indicator is Born

My pal The Pragmatic Capitalist hit upon a really interesting idea that I don’t believe has been attempted before – an indicator based on the bullish and bearish sentiment on finance blogs.

His methodology was admittedly primitive but the results are really interesting – it turns out that bloggers may be the perfect contrarian indicator (neither of us is surprised)…

From The Pragmatic Capitalist:

I ran the data over the course of the incredible March 2009 rally.  Not surprisingly, the results speak for themselves.  The sites I sampled (which will remain anonymous for obvious reasons) have been overwhelmingly bearish throughout the entirety of the rally with the exception of one period – January 2010 – just before the market experienced its largest downturn of the rally.

This is a really cool idea, I hope he continues to work on this indicator and eventually makes the sample blogs he used public.  Head over to TPC and see the chart itself…

Source:

CHART OF THE DAY: CAN BLOGS HELP YOU INVEST? (TPC)