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Drudge Report headlines predict financial crashes. Confirms Americans’ sheep mentality

Drudge Report Chart

According to a recent study by the Bespoke Investment Group, there is an inverse relationship between the number of Drudge Report headlines relating to finance and the direction of the S&P 500. This concludes that either Matt Drudge steers the US economy or that the Drudge Report, like most media, only focuses on the economy when conditions are extraordinarily bad. The study reports:

“The Drudge Report, with its 30,000,000 page views per day, is probably the most widely followed news source on the web.  News junkies visit the site on a regular basis to get their daily link fix, while those in the media world — from the major networks and newspapers to independent bloggers — go to it multiple times a day.  While political stories receive the majority of the site’s links, it’s whatever the site’s founder Matt Drudge believes to be the most important topic of the day that gets the main headline at the top of the page.

The Drudge Report is not a financial news site, so whenever a financial news story grabs the Drudge headline, it means that the story has crossed over from just a financial news story to a mainstream news story.  And when a financial news story crosses over into the mainstream media, it means that those that don’t follow the market on a regular basis are suddenly following the market.  This practically always occurs when the market (or economy, etc.) is going down and not up.”

“Below is a chart showing the number of days in which there was a finance related headline on Drudge over a rolling 50-day period since mid-2003.  At our starting point, the market was in the early stages of the 2002-2007 bull market.  Unsurprisingly, the number of finance related headlines hit a peak right around the time that the market made its financial crisis lows.  The max reading of 21 days out of 50 with financial related headlines on Drudge came on February 27th, 2009, which was just 10 days before the S&P 500′s bear market low on March 9th.  The number of financial headlines on Drudge then cratered all the way down to zero as the market and the economy recovered from the bear market, but then it started to pick up steadily once again in early 2010 as the crisis moved from our shores over to Europe.”

drudge chart use Drudge Report headlines predict financial crashes. Confirms Americans’ sheep mentality

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