Can Google predict the stock market?

An analysis of changes in Google query volume for search terms related to finance reveals patterns that could be interpreted as early-warning signs of stock market moves.

Tobias Preis, of Warwick Business School, Helen Susannah Moat, of University College London, and H. Eugene Stanley, of Boston University analysed changes in the frequency of 98 terms, such as ‘revenue', ‘unemployment', ‘credit' and ‘nasdaq', in Google searches from 2004 to 2011. The researchers found that using these changes in search volume as the basis of a trading strategy investing in the Dow Jones Industrial Average index could have led to substantial profit. In their paper entitled Quantifying Trading Behavior in Financial Markets, published in Nature Publishing Group's Scientif...