Roubini Sentiment Index keeps sending bullish signs for the stock market investors. Insider Monkey, your source for free insider trading data, has shown that Nouriel Roubini’s popularity has been a reliable sentiment indicator for the most part of the past 4 years. The increases in Roubini’s popularity are followed by declines in the stock market and the declines in Roubini’s popularity have been a bullish indicator for the stock market. The reason is simple. Whenever investors are turning bearish about the market, they search for Roubini’s latest opinions on the internet. Jumps in Roubini’s popularity in Google searches lead the declines in the stock market by up to 2 weeks. Conversely, declines in Roubini’s popularity shown in Google searches are an indicator for bullish sentiment.
In February we reported that Roubini’s popularity hit its post-Lehman low. Compared to early September, Roubini’s popularity declined by 50%. Compared to May 2010, it was down 75%.
Today, Roubini’s popularity is 20% less than its February level. The earthquake in Japan, the unrest in Arab countries, the increase in oil prices, the decline in U.S. dollar and the increase in precious metals couldn’t stop the decline in Roubini’s popularity. This only means one thing for the stock market: up, up, up.