You also find you spend a LOT of time looking at your own analytics from all the retailers you sell through. If you're only distributing through two or three retailers you can't get a good enough sample. Since we have 200+ retailers, I can identify trends MUCH better than someone who just throws their title up on Amazon and nowhere else.
I also regularly check independent bookstores to see who they are promoting, what their events are and what's trending in their stores. Here in Northern California we have some great reporting tools from the independent stores that give me a lot of great info. I'm also subscribed to LOTS of newsletters (e and print)
Another key is to actually go AGAINST the trend. If everyone is doing teen vampire stuff, that's exactly what you DON'T want to do. Your title will get completely lost in the scads of other titles exactly like it.
And ultimately? I don't choose books because I think they're going to all be huge commercial successes. I choose books that are well-written and bring something to the table that is new and hasn't necessarily been seen a million times and that I think people want to read. A comment you'll hear a lot when indie pubs get together is "does this title fill a hole in the market?" Maybe the Big Six publishers out of New York do things their way, but independent presses are a whole other ball game.
As for money grubbing...LOL. Most of us lose money on a lot of the books we publish. I don't think authors realize how much money goes into doing a title right. Throwing a title up on Amazon in self-publishing is NOT indicative of what a true publisher who runs things as a business does.
And yep...feel free to quote me. You can also encourage people to send industry questions to me at firstname.lastname@example.org . If you run into anyone who would like me to do a blog post, educational seminar on the publishing industry etc. I'm game. I've been in the ebook world for 15 years. I definitely know a thing or two! :)