start the earnings season gets into full swing with hundreds of companies releasing
earnings reports daily.
Media Sentiment algorithms can be used to issue alerts for about 20% of reporting
companies, as they identify stocks with a higher chance to move in the direction of the
Media Sentiment alert.
Figure 4.2 is an example of a browser window that shows Media Sentiment alerts
integrated into the TD AMERITRADE system as of November 3, 2009.
As companies release earnings news in real time, the system determines the sentiment
as positive or negative and delivers alerts in the active browser window, either as
HeadsUp or BigMovers. These alerts occur before 9:30 amest, or before the main
market opens.
After main market activity starts, for each HeadsUp alert Media Sentiment measures
trading market sentiment as expressed by two technical indicators in real time. When
overbought or oversold conditions in the market align with earnings news sentiment, an
UpperHand alert is issued in real time.
For each Media Sentiment alert, the user receives the following information: a ticker
symbol, a Media Sentiment indicator, the time when the sentiment was determined and
issued, the price of the stock at the moment the sentiment was determined, and con-
servative and aggressive stop limits that indicate the intervals that the stock prices
are likely to move. When a particular stop limit is reached, a stop-limit-reached alert
is issued and colored either green, to indicate that the limit was reached in the direction
of the sentiment, or orange, to indicate that the limit was reached away from the
direction of the sentiment indicated. Along with the stop-limit-reached alert, the system
prints the time when the limit was reached and potential gain/loss as a percentage of
the initial price that the stock ticker was at when the Media Sentiment alert was
released.
At the top of the page, the system calculates the potential total gain/loss for all alerts
issued that day.
Users who have a TD AMERITRADE account could also choose to receive
streaming quotes and real-time charts for each Media Sentiment alert or even trade
directly from the integration window.
The streaming quotes provide additional real-time stock price information for a better
and faster decision-making process.
The real-time charts are drawn on 5-minute bars and help users to visualize the daily
trend of a particular stock.
Figure 4.3 shows case studies for stocks that received positive Media Sentiment
alerts on November 3, 2009. These alerts are posted on charts directly for a better
understanding and visualization of potential stock price movement. Each Media
Sentiment alert is displayed on the chart along with the time the alert was issued.
The UpperHand alerts indicate the price at which the alerts were issued as additional
information.
Figure 4.4 shows case studies for stocks that received negative Media Sentiment alerts
on November 3, 2009. These alerts are also posted directly on charts for a better
understanding and visualization of the potential stock price movement. Each Media
Sentiment alert is printed on the chart along with the time the alert was issued.
The UpperHand alerts receive the price at which the alert was issued as additional
information.
Measuring the value of media sentiment: A pragmatic view 123