Can Soap Operas Indicate Stock Market Sentiment?

There are several market sentiment indicators that have nothing to do with the market: the Super Bowl Indicator, the Hemline Indicator and the Aspirin Indicator. Now perhaps a new indicator will emerge…the Soap Opera Indicator?

I haven’t done any real research on correlation between soap content and the stock market, but I’d venture to say that you know things are bad when the stock market decline becomes a topic of discussion on your favorite soap opera.

Several soaps are about family business, but the Young and the Restless is about a few high profile, make-believe public companies.  Recent story lines include a proxy takeover of Jabot Cosmetics, an SEC probe of the same company and a shareholder petition to have the CEO of Chancellor Industries tested for mental illness.   

It is interesting to think of how many people watch this show and don’t realize the free corporate vocab they are getting.  Anyway, the characters have been making comments about the ailing economy for awhile, but today it was the stock market.  Let me set the stage for you:

In a Genoa City, Wisconsin prison billionaire Victor Newman is being held on charges that he murdered the mobster responsible for the death of his young wife, Sabrina, in a fatal car crash.  Victor has summoned his ex-wife, Nikki, who was the mob hit’s intended target, to the prison to determine if she was involved in the discovery of a diary which detailed Victor’s supposed vengeance off of the Mexican coastline.  They agree that it has to be a forgery, but Victor then blames Nikki for the diary reaching U.S. soil and making its way into the hands of a magazine publisher. Nikki vehemently denies the accusations and after telling Victor where to go, she laments to a friend about how Victor blames her for everything. ”I’m surprised he didn’t accuse me of causing the stock market to plunge!”

Blame it on Nikki…if only it were that easy.  Nikki (pictured above) has done a lot, but she didn’t cause the markets to tank and she didn’t forge the diary either!

What does this mean to the markets? We’ll have to wait and see, but here’s my thought process: think about how long it takes writers to come up with these wild story lines, then the lag time between writing, editing, taping, more editing and airing the content.  Since it takes so much time for the show to air, I would use the indicator to suggest that negative content indicates the onset of bullish markets and positive content indicates bearish markets.

These are extraordinary times which would indeed throw off the results of any serious research, but I will liken this to the odd-lot trading indicator.  This indicator suggests that the wealthy or institutional investors look at what the smaller investors are doing and then do the EXACT OPPOSITE.  The idea is that by the time a regular person catches wind of a trend and acts on it, the tide has already turned. 

So, I’ll keep track of the markets (and Y&R) and we’ll see if I’m on to something!  In the meantime, I wrote an article on market anomalies and indicators.  Check it out: Making Sense of Market Anomalies

BTW I stumbled across a story with the cast of Guiding Light ringing the bell at the NYSE! 

Image source: wikimedia