In Brief

Recent experiments show how chatter on the microblogging site can be used to detect future changes in the stock market.

The Awl reports on some very interesting experiments by Johan Bollen at Indiana University, that show how chatter on Twitter can be used to predict changes in the stock market.

They explain:

Can the general mood on Twitter provide a sense of how the stock market will perform? Science says yes! “An analysis of almost 10 million tweets from 2008 shows how they can be used to predict stock market movements up to 6 days in advance.” Indiana University’s Johan Bollen and fellow researchers decided to track the Twitterverse using an algorithm” called the Google-Profile of Mood States (GPOMS), [which] records the level of six states: happiness, kindness, alertness, sureness, vitality and calmness.”

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