Thursday, August 30, 2012

Twitter and Google trends is mostly search related to retail traders.  Since the majority of retail traders do not short, they typically only buy.  It has been proven that a spike in interest w/ retail traders will cause them to buy those stocks.  However, after the interest dies down, the stocks typically fall about 5% / year on average.

After a show like mad money recommends a stock to buy, especially a small cap stock, if it is mostly uninformed buying, the stock will go down after.  This is a lucrative shorting entry point.