“Recession” or “Rebound”?

In a previous article, we demonstrated the stock market movement prediction using Google Trend search term (Read more here).  This week we are going to use the Google Trend to study the stock market direction using a different search term.

In the following graph, the search term “Recession” frequency and the MSCI World Index were plotted together from 2004 to 2018.  The frequency of the search term is plotted in orange while the blue curve is the MSCI World Equity Index.

Coincidently, two significant peaks of the search term frequency (red circle) occurred at the reversal of the market down trend.  This suggests that market might rebound when the sentiment is very negative.  So, our next question is whether the current “recession” sentiment has reached its peak?  Google Trend might have the answer perhaps?