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Wall Street stockbrokers may have found a new way to decide which shares to buy or sell after research claimed that chatter on Twitter can predict stock market movements up to three days in advance.

Indeed, researchers - Johan Bollen and Huiana Mao at Indiana University, Bloomington and Xiao-Jun Zeng at the University of Manchester - claim that Twitter has an 87.5 per cent accuracy rate predicting the 'daily up and down changes in the closing values' of the Dow Jones Industrial Average.

The research measured the mood of 2.7 million Twitter users, who released 9.7 million tweets over ten months in 2008, using various algorithms, including the Google-Profile of Mood States (GPOMS), which measures six mood levels: happiness, kindness, alertness, sureness, vitality and calmness. These were then compared with the closing moving of the Dow for each day.

Author Bollen, who is an associate professor at Indiana University's Centre for Complex Network and System Research, said:  'The public mood, as expressed on Twitter by millions of people posting their Twitter feeds on a daily basis, fluctuates over time and of those fluctuations, at least one of the indications we monitor - namely mood, calm versus anxious - is actually correlated with the Dow Jones Industrial Average's closing values.  

'It was surprising to us, because we thought it would actually follow the Dow Jones Industrial Average, in the sense that if it goes up, people are happy, if it goes down people are sad. But it turns out, the movements in the public mood actually predated from three to four days the up and down movements of the Dow Jones Industrial Average.'

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