Drop in Clicks Signalled Market Woes?

Happy Birthday to us, COTs Timer. Last Saturday marked five months in full operation mode for this blog. I've had over 17,000 absolute unique visitors and 75,000 page views from 112 countries (top five: the U.S., Canada, Australia, the UK and Italy) and 2,796 cities (top five: Vancouver, Toronto, Montreal, New York and LA). Thanks for all your support and input!

What's interesting about all this is a curious phenomenon I've heard about from other financial bloggers: visits (and Google Ad clicks) seem to be correlated with market ups and downs. This was especially notable during the summer's market correction. (I've also noticed a drop-off in messages posted to a market list I'm on when things go sour.) I've just done a study of this, and sure enough, there's quite a fascinating correlation. Page impressions have a 0.49 correlation with the S&P 500 (same day open price), while Ad earnings have a 0.24 correlation. So it would appear people are not only less willing to investigate the resources represented by the ads when the market goes down; they also tend to explore less financially online, period. People are simply cocooning.

But what's far more interesting is the click data also seems to have some predictive value. Page impressions have a 0.52 correlation with the S&P 500 open price one trading day later, and the correlation keeps rising to peak at 0.63 for eight trading days out. Not bad! In other words, ups and downs in click numbers are often reflected in market prices eight days later on average.

Word of warning: My number of page impressions has slowly dropped since an interim peak on Oct. 9, falling by 60 percent as of yesterday. This has of course roughly coincided with the recent market selloff. I'll keep you posted about significant changes in this rather interesting indicator, including when (or if!) it starts heading back up.