This is probably closer to a magnetorheological fluid due to the particle size, but ferrofluid is easier to say in mixed company.
Alex has been wanting to do a short video on making ferrofluid, but the method we had tried previously is pretty complex and has had mixed results so far. We'll keep trying, and post a video should we get it to work.
To get started, you will need:
12 g Iron oxide
5 mL Mineral oil (we used baby oil)
1.5 mL Oleic acid (I've heard you can use olive oil, but there's a UV light step)
In a small dish, mix the mineral oil and oleic acid. Then add the iron oxide. Mix very well.
Alex says in the video that you can get iron oxide from steel wool that has been burned, and we may try that in a future video.
We got the idea for this procedure from skippy38305.
Constructive comments and suggestions are always welcome.