President of Downside Hedge
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Blair Jensen is President of Downside Hedge which provides market commentary and hedging strategies for individual investors. His development of a stock market sentiment indicator based on the Twitter stream is changing the way investors and traders ... more


Market Risk Warning - Friday, Feb. 9
Market risk warnings come in two varieties. Ones that last for only a week or two (a false signal) and ones that last for several months (a significant correction or bear market).
Diverging Indicators
The market risk, economy, and strength categories are soaring higher, while the market quality and trend categories are lagging substantially.
Consolidation Likely
Last week, I mentioned that it might be time for some consolidation. This week, it appears more likely. My measures of market quality have dipped below zero and my measures of market trend are dropping pretty fast.
Breadth Declining
The market keeps working its way higher, but the bearish count is rising. Overall sentiment for SPX is very optimistic, but has been in a fairly solid range between 2550 and 2600 on SPX.
Markets: More Of The Same
My core market health indicators bounced around a bit this week, but they’re all still positive.
Onward And Upward
My core measures of risk fell slightly this week. That isn’t normal when the market is making new highs.


Latest Comments
Market Risk Warning Is Flashing
2 years ago

The core portfolios went from 100% long to 50% long and 50% short (hedged with short positions) between July 10th and August 14th. The market risk warning signals at inflection points. We're either a week or two from the bottom or just starting a major decline (greater than 20%). For that reason I change the hedge to something that will benefit from higher volatility. Most people think you should buy volatility when it's "cheap". I'd rather buy it when it's valuable.

Waiting Without Hope
2 years ago

Carol, we track and score every tweet for over 650 symbols on Twitter. Any person who tweets is included in our "control group". However, we throw out spammers. We have several hundred thousand people that tweet about stocks and have caught almost 50k spammers.

The term sentiment only roughly applies in this case. Our system looks for actions (buying, selling, hedging, etc.), events, fundamental analysis, technical analysis, and last of all opinions. Tweets with more justification for an opinion are scored higher. So in the end the indicator shows the direction of the crowd. We use the trend of Twitter momentum to make trades. You can see more info here:

Count Of Bearish Stocks Rising
2 years ago

We've created an algorithm that reads the Twitter stream and calculates bullish and bearish reading for stocks. The chart above uses bullish and bearish stocks over the previous month. You can see more info here:

In this article: SPX
Why Breadth Matters
2 years ago

Yeah, the percent of stocks above their 200 day moving average dipped below 60% this last week. Imagine fund managers with 35% to 50% of their stocks in bearish trends. They'll feel the pressure to sell if the market starts a decent decline. That's what creates the big ones.

In this article: SPX
More Evidence Of Accumulation Vs Distribution
2 years ago

Yeah, the rails have been beaten up lately, but bouncing today.

In this article: SPX, SPY, TWTR
More Deterioration
3 years ago

It looks like fear of a slowing world economy pushing money to safety. Mega caps and government bonds are too strong for a "healthy" rally. Performance from junk bonds show an aversion to risk as well. I get the sense that people are hunkering down into the end of the year over concern of what 2015 will bring.

Twitter Predicting Lower Prices For Emerging Markets
3 years ago

Our spam detection system is pretty good at finding people who are simply bashing or pumping stocks. We try to weed out anyone that fits a particular to speak.

In this article: ARO, ESV, RSHC, CRUS, EEM, XLE
Twitter Predicting Lower Prices For Emerging Markets
3 years ago

We've been collecting data for over two years. Trades with trend have a win rate of 65%. We have a spam detection system looking for scammers, pumpers, etc.

In this article: ARO, ESV, RSHC, CRUS, EEM, XLE
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Downside Hedge
Blair Jensen
Downside Hedge calculates Twitter stock market sentiment, support, and resistance from your tweets. Downside Hedge also provides hedging strategies for individual investors.