Datamining Sentiment from News Text

In an earlier post, I mentioned different companies using social media to gather information for stock market trades. The larger area of developing predictive analytics and datamining of news article text has several interesting players: Thomas Reuters [PDF], Dow Jones (RavenPack), Predictive Signal, and MarketPsych. Predictive Signal claims 10.4% positive returns (not annualized) over a nearly 3 month period (May to Aug 2011) versus an S&P 500 decline of 9.9%. MarketPsych cites a 25+% better returns than the S&P 500 with a third of the volatility from September 2008 to December 2010. In the latter, they actually traded over that 2 year period using their proprietary signals (MarketPsy Long-Short Fund LP).