Most of the time, movements in the stock market are relegated to the “Money” section of the newspaper. But when you see sharp drops like we’ve seen recently, the market makes the front page. When the market hits the front page of the newspaper or the network news, it means it has the attention of “Main Street” and not just “Wall Street”. From a contrarian perspective, this is generally bullish. It’s the old “buy when there’s blood in the streets” saying.
A few years back we created the “Drudge Headline Indicator” to measure the attention being paid to stocks outside of normal market participants. When the Drudge Report’s headline is focused on the market, it means that everyone is watching. (And also that a lot of people are calling their advisors as well.) On recent days when the market has been down big, sure enough the Drudge Headline Indicator has been triggered.
Another way to monitor the attention of “Main Street” is through Google’s nifty “Trends” tool, which tracks the number of Google searches for words or phrases over time.
We used the Google Trends tool to see how much people in the U.S. have been searching for three market related phrases recently. Below we provide snapshots of the searches.
As you can see, there has been a big spike in searches for the “stock market” and “bear market” recently. Searches for “stock market” are higher now than they were during the 19% correction we saw in 2011, but they’re still well below searches we saw during the Financial Crisis. Searches for “bear market” are still below 2011 levels and well below Financial Crisis levels, but they are jumped too.
Where we’ve seen a really big jump is in searches for “market crash.” After a swift 10% drop from its highs in a matter of days, searches regarding a crash spiked.
Yep, Main Street has taken notice.
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