Put down the 10-K filings and the stock screeners. It's time to take a break from the traditional methods of generating investment ideas. Instead, let the crowd do it for you.
From hedge funds to individual investors, scores of market participants are turning to social media to figure out which stocks are worth watching. It's a concept that's known as "crowdsourcing," and it uses the masses to identify emerging trends in the market.
Crowdsourcing has long been a popular tool for the advertising industry, but it also makes a lot of sense as an investment tool. After all, the market is completely driven by the supply and demand, so it can be valuable to see what names are trending among the crowd.
While some fund managers are already trying to leverage social media resources like Twitter to find algorithmic trading opportunities, for most investors, crowdsourcing works best as a starting point for investors who want a starting point in their analysis.
So, today we'll leverage the power of the crowd to take a look at some of the most active stocks on the market.
SPDR S&P 500 ETF
- Nearest Resistance: $218
- Nearest Support: $208
- Catalyst: Technical Setup
The big SPDR S&P 500 ETF (SPY) , the best investing proxy for "the market," is leading off our list of most active stocks. SPY has been a popular trading vehicle lately, albeit not for the right reasons.
Following the first eight-day losing streak since 2008, market participants have been selling SPY as a way to cut their exposure to equities. Technically speaking, the recent selloff in the S&P coincides with a violation of the index's main trendline for 2016. At this point, it's unclear where the next important support level comes into play, although it's plausible that we see buyers step in here (see that dashed line on the chart above).
It's a good idea to wait for confirmation of an up-move in SPY before increasing your exposure to stocks this fall.