Traffic Indicates . . .

In the Soros discussion this morning, Drey asks (in comments):

"Curious about what your unofficial # of visits to the site indicator may be telling you about the likelihood of an oversold bounce on Monday.  My gut tells me that while this may be possible or even likely, one of these days a big distribution day will be followed by an even bigger distribution day as the bottom falls out completely and that’s when the fun will really start.

So which will it be, short term bounce or ‘look out below’?  Either way the Jan/March lows will be taken out by the end of summer so I guess you can kill me fast or kill me slow…"

That’s a good question worth digging into:  As the chart below shows, Traffic has been softening this entire week, at least when compared to the prior three weeks.

In the past, we have seen big traffic spikes accompany tradable bottoms. We are not seeing the same degree of fear we have seen in prior whooshes down. Whether that’s a function of sentiment, vacations — or just me slacking off — I cannot say for sure.

However, I am unsure as to how valid this lack of traffic spike is as an indicator. Hey, Summer officially starts today — and we do not have a whole lot of past examples to draw from. I can say that I didn’t get the sense of a high volume panic that accompanied the prior traffic spikes — like the ones we saw on January 23rd.

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30 Day Page Views, TBP
30_day_traffic

via Sitemeter

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Previously:
Blog Traffic as a Contrary Market Indicator (February 2008)

http://bigpicture.typepad.com/comments/2008/02/blog-traffic-as.html

Traffic Spike? (January 2008)

http://bigpicture.typepad.com/comments/2008/01/traffic-spike.html

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What's been said:

Discussions found on the web:
  1. Mike in NOLA commented on Jun 21

    Can we get your Google Analytics password? :)

    But seriously, you have quite respectable numbers that are big enough to give some statistical meaning.

    I run a few websites on the side. Small time stuff. Haven’t delved into pulling out the raw numbers. I wonder if it’s possible to pull weekly numbers into Excel and run a correlation between number of hits or the change in hits with the S&P or the change in the S&P.

    Unlike some of the technical analysis mumbo jumbo, it sounds reasonable that there be some sort of correlation.

  2. Mike in NOLA commented on Jun 21

    theyieldcurve:

    Having the S&P drop to 1050 off a high in the 1560’s or something last year is really only an average bear market.

  3. theyieldcurve commented on Jun 21

    Mike – I agree with your interpretation of the numbers. I think the real issue is what happens afterward.

    I really doubt the current economic paradigm could handle that kind of a market drop without further more serious ramifications. In particular, we’re in the early phase of a credit contraction…and the Fed is running out of both ammo and credibility.

  4. Marcus Aurelius commented on Jun 21

    In the words of the immortal (really) Mr. Natural, “Don’t mean sheeit.”

    The market is broken (broke). We might get a few more smooth miles out of it, but our days of cruising down the highway without a care in the world are over.

  5. Robert commented on Jun 21

    Hey investors, or should I say rank speculators,

    THIS IS A BIG BAD BEAR MARKET. IF YOU CONTINUE TO ATTEMPT TO PICK A BOTTOM, YOU WILL BE BROKE BY THE TIME IT ARRIVES. WHEN THIS BLOG, THESE COMMENTATORS AND ALL THE OTHER GENIUSES FINALLY GIVE UP BECAIUSE THEY HAVE LOST ALL THEIR MONEY AND THEIR JOBS AS WELL, THOSE FEW LEFT STANDING WILL GET SINCERELY RICH.
    PLEASE GO AWAY. PLAY WITH YOUR KIDS. MAKE SOME MONEY IN YOUR JOB.
    SAVE SAVE SAVE….FOR THAT RAINY DAY. ITSA COMIN’

  6. Bob A commented on Jun 21

    I mentioned to a friend the other day I had last fall we would know we were closer to a real bottom when ‘buy and hold’ investors report they are no longer opening there brokerage statements each month.

    To which she replied: “Well I’m not, and my friends aren’t either. They’re afraid to.”

    VIX doesn’t seem to be there yet for major indexes no?

    Banks seem tempting… but it also seems likely could still be second wave of mortgage defaults yet to be accounted for.

  7. Nihilism commented on Jun 21

    My guess/interpretation about the lower trafic and lower site visits during this low.

    # Look at the VIX index during last August, February & March crisis news. It was in higher 30s/high. The fear of major meltdown is gone — thanks to “official” bail-out/liquidation/put-excercise by the fed for Bear-Sterns/JPM in March.

    # Bankers & Brokers are “Thugs” is accepted/norm by now and not a suprise news anymore. They will keep diluting and continue their slow death process.

    # the fear factor my guess is generally high when we are in the early transition phase from: Bull to Bear market; and once bear trend gets accepted the fear spikes will be less except perhaps in later phase of a bear market again when it hit major new lows or there is another crisis.

    # 1300s in S&P is the new accecpted level now — and hence interest to blogger sites on on-going credit issues will be less.

    # Perhaps folks are tired of reading the same credit issues and it’s summer time now.

    BR: Did you notice Barron’s propoganda efforts to come up with contrarian/stupid magazine covers:

    Bulls are back (April 29th) Buy banks (Hitting Bottom March 24th); Buy GM (June 2nd); and now Oil Bubble.

    My guess is they will put a Bear on the cover if we hit the 20% drop/bear mark in equity markets in next few weeks.

    The good part about these covers is: We have a good/barron’s cover data point and if they are saying Oil is a Bubble — it means it can stay higher for a while.

    And my gut says the debt crisis spill-over from the Big Three autos will bring new wave of far reaching economic fears for the markets.

    Havea a good summer all.

  8. paul commented on Jun 21

    Either way here is a possible trade:

    (Using the March lows)
    The Dow is 3% above its low
    The S&P is 5% above its low
    The Russell 2000 is 13% above its low.

    Good bet that the Russell will do some catching up (too many people playing the “hey consumer sentiment sucks let’s buy the small caps”). Possible trade: Buy the SSO or DDM paired with the TWM.

  9. Owner Earnings commented on Jun 21

    This decline certainly doesn’t feel like the declines from January and March.

    The S&P 500 would have to decline another 75 points to be at those levels though, so when that happens maybe it will feel like January and March.

    Especially if it’s a large regional bank that causes the problem and we see a bank run.

  10. ardano commented on Jun 21

    this is a daily must read…good market or bad…or should I say bad market or good. That said…sell the rallies and trade the dips, best to all

  11. ostiguy commented on Jun 21

    Have you drilled into visits with/without referrals for correlation?

  12. Mike in NOLA commented on Jun 21

    theyieldcurve

    I think you are being overly generous in using the present tense regarding the Fed’s ammo and credibility :) Was gone long ago.

    BTW, how did RBS come up with 1050? I agree with you that what they describe sounds a lot more serious than that.

  13. bc commented on Jun 22

    I am wondering if the following situation could take place… oil spikes. Bin Laden is caught. Oil plummets. Bush’s approval rating goes up.

    I have a very difficult time believing we can send machines to mars but cant find someone that continues to record new audio…

    Why is the government mandating cable boxes… so they can see you at home!

  14. Bob commented on Jun 22

    More than a few sites are seeing an increase in traffic lately, how much is due to this is not known. But 20 – 70 million users can skew things more than a bit. Here’s an excerpt:

    “Early last month, webmasters here at The Reg noticed an unexpected spike in our site traffic. Suddenly, we had far more readers than ever before, and they were reading at a record clip. Visits actually doubled on certain landing pages, and more than a few ho-hum stories attracted an audience worthy of a Pulitzer Prize winner. Or so it seemed.

    As it turns out, much of this traffic was driven by the new malware scanner from AVG Technologies.

    Six months ago, AVG acquired Exploit Prevention Labs and its LinkScanner, a tool that automatically scans search engine results before you click on them. If you search Google, for instance, and ten results turn up, it visits all ten links to ensure they’re malware free….”

    Since the Big Picture usually turns up high on google’s results lists, it is possible…..

  15. Greg0658 commented on Jun 22

    bc – you missed the misplaced nuke parts are assembled and exploded by al-quaeda or another false flag operation sustaining this MIC and disaster capitalism another 5 or so

  16. Greg0658 commented on Jun 22

    I got sidetracked – was going to tell our host your blogging topics are fine

    I think secondly its summer

    but firstly – I see the media and politics reacting to blogs so time spent here does matter, but issues in TBP are to big for words, being an American I want it now or I can wait and make do without (the grace of my religion) I want change but won’t fuel a violent change (like Robert sees)

    blogs in my opinion are fast track rock n roll, golden age rock failed to change the world, so will blogs, the imbedded money system won’t allow change

    resistance is futile … in a single generation (life)

    squeeky wheels get the grease if the master mechanic cares to fix the wheel
    (sometimes master mechanics decide to discard the vehicle)

  17. sue commented on Jun 22

    I’ve been waiting for the bottom to fall out since last July. I would get excited everytime the market went up under 12k. Then it would just come right back up in a blink. It’s getting really boring. I’m still bored… so I think that’s why traffic has been falling off at this site. People just feel like its the same thing as last time.

  18. mark mchugh commented on Jun 22

    I believe that traffic monitoring can be useful. I’ve been visiting alexa and comparing traffic patterns of sites that I think might be useful. One problem is that there is a five day delay in publishing site stats. The other, of course, in relevant site selection and interpretation of data. Here’s a short list of sites I’ve been looking at:

    kitco (metals)
    scottrade (individual investors)
    forex (currencies)
    americanfunds
    fidelity (mutual funds)
    thestreet (research)

    note: dot-coms removed for spam filter.

    Now, I’ve got Bob’s comments to factor in as well (thanks). Any suggestions?

  19. mark mchugh commented on Jun 22

    I believe that traffic monitoring can be useful. I’ve been visiting alexa and comparing traffic patterns of sites that I think might be useful. One problem is that there is a five day delay in publishing site stats. The other, of course, is relevant site selection and interpretation of data. Here’s a short list of sites I’ve been looking at:

    kitco (metals)
    scottrade (individual investors)
    forex (currencies)
    americanfunds
    fidelity (mutual funds)
    thestreet (research)

    note: dot-coms removed for spam filter.

    Now, I’ve got Bob’s comments to factor in as well (thanks).

    Any suggestions?

  20. dr lenz commented on Jun 22

    large caps into small and mid, it has longer-term bullish implications and doesn’t bode very well for the masses who seem to be looking for 1300 on the S&P. I noticed even the bullish Carl Futia has joined the 1300 fray recently. With so many wanting a major selloff from here odds are it will be a minor one.
    Will the market crash?

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