It’s interesting, though, the speed of the mini-crash has led some commentators to suggest that keywords from Twitter are directly feeding automatic selling programs. No doubt some people who thought they were pretty smart ended up taking a bath on this. Expect to see more of the same…
Yeah, machines reading the news is no new thing in the trading world. Even “old school” companies like Reuters offer a machine readable news product.
A couple years ago there was a hedge fund that made trades based solely on sentiment on Twitter. They actually beat the market (for the short time they were running). Now they sell their proprietary social media analytics tools.