An analysis that may interest only me

Saturday, February 16, 2008

It's a fairly well-established phenomenon that financial website traffic goes through the roof when markets go to hell in a handbasket. So when Macro Man decided to perform a little analysis last week, even he was surprised by the close link between traffic and equity market activity.

The chart below sets out daily volume in the SPX, depicted in red and shown on the left-hand axis. The blue shows shows daily traffic on this very site, calculated in terms of deviation from trend. In other words, traffic has generally increased since the inauguration of this space a year and a half ago, and that traffic is measured against that upward-sloping traffic trend.
What's interesting is how closely the two series appear to match up; one could even argue that web traffic is less volatile that daily equity trading volume. How long, then, til someone calculates an indicator for financial web traffic that can either confirm a large equity move or show divergences?

Regardless, both traffic and trading volumes suggest that the recent equity gyrations have occured in the context of decreasing interest from the public at large. 'Twill be interesting to see when the next traffic volume spike occurs...

Posted by Macro Man at 3:13 PM  

8 comments:

I thought about this some too. The current "gold good" to "gold bad" ratio is two to one (in terms of search results at Google).

That's probably meaningless though.

I would love it if all the gold newsletters combined and became a publicly traded company. The resulting data on new subscribers would be interesting as hell (to me) and probably useful enough for trading at times too...

Daniel said...
11:02 AM  

Cannot see the graph. Too bad the traffic cannot be used to predict the market.

Jin said...
2:01 PM  

Barry Ritholtz had a post in similar vein earlier this month.

http://bigpicture.typepad.com/comments/2008/02/blog-traffic-as.html

Anonymous said...
4:35 PM  

Indeed we have case of the missing click.

I wonder if Holmes might receive a call, and perhaps offer of a lucrative retainer from that young oddly-named American, Dr Google? He says he takes an intense interest in such matters and by reputation is a genius and is as rich as Croseus, though he has odd and somewhat childish mannerisms.

serindippity said...
5:26 PM  

Indeed, Dr. Google needs to be consulted on this it seems.

Wonder whether Holmes will be querying this issue before he hits the slopes on his carves tomorrow?

Enjoy, either way.

Claus

CV said...
9:26 PM  

you go see the doc when your well, morals man?

if so, i guess your an old boy by now....

Anonymous said...
9:14 AM  

Don't confuse "relationship" with "cause and effect" :)
-Ivan

Anonymous said...
11:46 AM  

leet mee know wheen thee hit index is set up and models using it to trade SPs. then I'll hit your site in earnest to manipulate he mkt. It will be fun when the FSA does us for manipulating the mkt by reading your comments ever 5 milliseconds.. !

Hope you having fun in the alps matey. and the Russians haven't screwed your bar prices as much as they have eur/usd !!

Richy Rich said...
9:15 AM  

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