A Closer Look at Apama’s Economic News Alerts

If you haven’t noticed, Apama is doing some interesting things in the CEP space toward future event correlation.   I have been closely following their partnership with Dow Jones to support their elementized news feed. Let’s take a closer look.

The Apama screenshot, Economic News Alerts, highlights three or four top level tabs:

• Welcome;
• News based momentum trading;
• CPI news trade launcher; and
• All Economic Indicators.

In the sample screenshot, we are looking at examples (test data) of economic indicators  from 2004, 2005, 2006 and 2007, timestamped on April 30th, 2007, 17:16:15 – 17:16:23, specifically:

• The 1/2006 Employment Cost Index (ECI);
• The 5-8/2005 Producer Price Index (PCI);
• The 6-11/2004 Consumer Price Index(CPI);
• The 8-11/2004 Consumer Price Index, Average Weekly Earnings (CPI);
• The 4-5/2004 Consumer Price Index, Energy and Food prices index;
• The 3-4/2006 Consumer Price Index, Energy and Food prices index; and
• The 10-11/2004 Weekly Jobless Claims.

I believe the quantities and indicators (from the screenshot) are from test data because, believe-it-or-not, I checked a few of the indicators in the screenshot and they were different than the actual published values.  Plus, in my mind, it does not make much sense to be trading in April 2007 based on indicators in 2004 (for example), please comment if you have a different opinion on this.

None-the-less, the examples in the test data show how traders are beginning to think about executing trades based, in part, on the differences between the expected values of economic indicators v. the actual values, hot-off-the-press, in real-time. 

An article by Wall Street & Technology, Trading on the News, has an interesting quote on this topic:

“The Holy Grail is to do in-depth semantic analysis of news, and I think that’s going to be helped by the proliferation more of XML-based news feeds and research feeds, and popular Web XML feeds like RSS and Atom — and then there’s XBRL and RIXML,” says Carrie. “If you’re XML-based, your content can be classified,” he continues. “That reduces the complexity of parsing and transferring the information into a format that can be read by the computer.”

There are folks who doubt whether news, by itself, could actually be used to trade. However, many believe that traders will certainly augment their strategies with news events.