New Directions in Sentiment Analysis: Charting Words
Abe Cofnas · 2012
This chapter introduces the emerging field of text mining as a new form of sentiment analysis for use in trading markets. The art and the science of analyzing sentiment in the market are evolving. Charts following this logic do not simply map price action, but also track opinion data. One sees this in consumer and producer sentiment data and the charting of that data. Also emerging is a new branch of sentiment analysis that is generating an entirely new type of data for the trader to evaluate and use in shaping trades, which is the field of “text mining.” The field involves information extraction (IE), natural language processing (NLP), text mining, and event analysis. Even at this early stage in text mining, the trader can employ this new form of technical analysis of sentiment by using word (or tag) clouds. Word clouds are part of a class of text mining that scans a document and generates word frequency counts and analyses of word associations. By inserting text into the program, an arrangement of words represented as a function of their frequency is generated. One can instantly see which words are important. Words are both coincident and leading indicators of sentiment. Consider that any official statement by a key government official is carefully scrutinized for the impact every word will have. It therefore makes sense to focus on word appearances, their frequency, and their proximity to other words.