The RavenPack Hype Index which you can access on RavenPack Coronavirus News Monitor, measures the percentage of news outlets that are talking about the virus, and if it corrects, as the charts suggest, it could be indicative of a general reduction in overall reporting of the pandemic.
What else could it mean? The Hype Index has been shown to act as a leading indicator of the actual number of coronavirus cases (see chart below), so a fall in the Index may suggest cases themselves could also in time fall.
There are already signs the rate-of-change of increase in cases is waning ever so slightly.
Data out at the end of last week (see below) showed a brief pull-back in cases on Thursday 27 and Friday 28. It was the first time new cases failed to make news highs on two consecutive days since the start of the pandemic, however, new cases then peaked again on Monday (March 31), confounding a simplistic too-negative analysis.
The quarantine measures implemented globally, as well as the 2.2 trillion stimulus package from the U.S government further increase the likelihood the worst could be over, both from a human and financial market perspective.
The size of the stimulus program sets a precedent: it is over three times larger than the circa $700bn TARP bailout program implemented during the great financial crisis in 2008..
Whilst there is no way of knowing for sure whether we are near the end, it is worth looking at the evidence, particularly when indications seem to be pointing in that direction.
Head and Shoulders Top
A topping pattern called a head and shoulders (H&S) has formed on the Index during the second half of March, a sign the time-series is peaking and a warning of an impending decline.
A break below the base of the pattern or ‘neckline’ as it is sometimes called, which is situated at about the 50% level on the Hype Index would confirm a decline.
The Index would then be expected to fall the same distance as the height of the pattern - in this case 20 points - indicating a likely target at circa the 30% level.
This would seem to suggest that the share of the news that is coronavirus-related could fall to 30% over time, with possible corresponding fall in cases to follow.
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