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Billboard Top 100 Indicator

The newest indicator on this list is rooted in pop culture — it's got a good beat, and you can dance to it.

Phillip Maymin, assistant professor at the Polytechnic Institute of New York University, released a study in late 2008 that analyzes the connection between volatility in the market and trends in popular music.

Maymin analyzed the “beat variance” in songs from the Billboard Top 100 chart using sophisticated computer software, looking at songs from 1958 through 2007. He found that songs with high beat variance — individual tracks that shift tempo throughout the song — are preferred in times when market volatility is low. When volatility is high, people tend to prefer songs that have a more consistent beat.

Mayman suggests that high beat variance is more intellectually draining, and thus less popular during times of high volatility. His paper also analyzes trading volatility based on his findings, and the potential profitability of the indicator.

Can this trend be trusted? Maymann himself suggests that mood is the key driving force of this indicator, which has been known to affect markets. It certainly is the most scientifically approached indicator on this list…

The original scientific paper can be downloaded here.

Photo: Billboard.com