Another barometer of investor sentiment could be the number of times the ticker symbol for a company is used as a search term. Google Trends provides a tool that helps track search term volume and it appears to be a forward indicator. Much of human behavior is based on conditioning.

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Our years, months, weeks and days are clearly mapped out. Within that, our hours, minutes and seconds are all accounted for. You wake up, take a shower, make yourself look presentable, have a cup of coffee out of your favorite mug and you're off to work. You arrive at work and don't even remember how you got there. Then you can't wait to get home where you can eat, relax, look at emails and prepare yourself to do it again the next day. Certainly, if there are patterns in human behavior, there might be some portion of this pattern that provides clues about the direction of the market.

Now, I'm no advocate of technical analysis for stock selection, but it can tell you when to buy something you've already decided to purchase. In other words, it can help with timing. Measures of volume can give you an idea for the level of interest in the market. Volume is, in a sense, a measure of the market's current emotion. When that volume lingers, it turns into a "mood", often trending sideways, up or down over a period of time.

Some stocks trend up or down in such predictable ways within a range over a long period of time that they can now be said to have a "temperament". Ultimately, the market is also on auto-pilot. One great thing about being human is this gift of metacognition -- the ability to think about the very thing you are thinking about.

So let's ask the question, is there a better way to think about the emotion, mood and temperament of the market? If there is, I'm sure Google has the answer. Google provides a tool called Google Trends. It shows information on the number of searches for a given "search". What exactly is a "search"? It's when someone puts in a word or phrase in Google's search box and then clicks "search". The goal of the "searcher" is to find information about the stock price.

So these are presumably investors looking to find more information about a stock. This is a measure of investor interest -- good or bad. And, it's a better measure than volume and momentum, because "searches" are not commitments. This is where people go prior to making a commitment; they do research prior to the investment decision.

When the number of searches is abnormally high it could be a sign of eminent change; something has changed in the matrix. JP Morgan Chase NYSE: JPM , Bank of America NYSE: BAC and Wells Fargo NYSE: WFC are all compelling investments.

Though WFC edged out JPM in net income again in Q2, JPM is still the largest US bank by assets. JPM data by YCharts. And, here's a chart of searches for the term "JPM" over roughly the same time period:. You will notice that high search volume is negatively correlated with stock price, which suggests investors search for stock more when the price is going down, but can this be used as a forward indicator; does it have any predictive value?

The end of month reading on January shot up above the red line -- this was a change of investor emotion, a change in routine -- auto-pilot has been turned off. If you looked at this Google Trends chart on February 1, , you would have seen a spike above the red line.

If you subsequently sold JPM on February 1, you would have also been one of the smartest people in the world. On August , search volume dropped below the red line which was the start of an increase in price, a new trend.

You will notice a spike at "H" around the middle of This is when a news story was put out about JP Morgan Chase in Barron's. The story created a lot of interest in the stock, but did not result in a sell-off.

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Indeed, the stock has been fairly steady since August The dashed line at the end of the chart represents a forecast of future search volume for the term JPM. Based on the search volume forecast, JPM will be going up over the next 3 months, though I don't know how reliable the forecast can be. The next highest bank in terms of assets is Bank of America.

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Unlike JPM, BAC's price has not followed net income which explains the low earnings multiple. Here's a price chart:. BAC data by YCharts. This is a little trickier because prior to November , there were no searches for BAC and then suddenly, there's interest. We go from 0 to literally from December to April Then from May to May , searches fell again.

Only to have a sharp spike July WFC data by YCharts. January just after the "N" mark , was a breakout month for WFC in search volume -- this is when folks turned off the auto-pilot and the stock became increasingly volatile.

If you sold WFC on February 1, you would have seemed a genius. The chart also shows a buy signal as it crosses above the upper red line. A more prudent investor may chose to wait until "search volatility" has dissipated. Sometime around the beginning of the market returned to its pre search volume. Incidentally, the dotted line at the end there looks to be telling us that WFC is trending flat, but again I don't have much faith in the forecast.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha.

I have no business relationship with any company whose stock is mentioned in this article. Portfolio Strategy Fixed Income Bonds Financial Advisors Retirement Editor's Picks. Can Google's Search Volume Predict The Market?

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Summary The stock market is ultimately a mirror of investor sentiment. Want to share your opinion on this article? Disagree with this article?

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