The magazine cover indicator has been around for a long time. I’ve written about it many times. It works like this: a magazine like BusinessWeek or Barron’s runs a cover that’s clearly bullish or bearish. However, by the time a major magazine has gotten around to embracing and editorializing market sentiment the trend is pretty long in the tooth and ripe for a reversal. Hence, this is a contrary indicator and it’s usually pretty accurate.
In the age of “high frequency trading” it’s only appropriate to update our stock market indicators to modern times and time frames. Magazines have lost much of their relevance in the internet age. This is where BusinessInsider, a business blog I actually enjoy following, has stepped in to fill the void.
Last week, the blog’s founder and CEO tweeted:
At the time the stock was down about 2%. You read that right. In BI parlance, 2% constitutes a full-fledged “crash.” Now BI is well-known for sensationalizing headlines to boost page views but this took it to a new level. And, interestingly enough, the stock price immediately reversed. (Obviously they agreed the call was just too ridiculous because after the price reversed they quickly changed the headline.)
This morning the market opened lower as did Apple’s stock price. BusinessInsider ran this insightful article:
‘Did they publish an “Apple Is Going Up Post” this afternoon?’ you might ask. Nope. So, according to this fledgling indicator, this new uptrend in the stock may last a while. Like maybe even a few hours. Just keep an eye on those BI headlines for clues.