By Jason Simpkins
With unemployment soaring, consumer confidence plunging, and gross domestic product shrinking, there aren't many indications that the market will rebound any time soon. But there is one.
The oft-overlooked "Super Bowl Indicator."
Many analysts write the indicator off as superstition, but the numbers don't lie.
The Super Bowl indicator has correctly predicted the direction of the Dow Jones Industrial Average in 33 of the 42 years the game has been played. That's an astonishing 80% success rate. Between 1967 and 1997, the indicator was correct 28 out of 31 times – a 90% success rate.
Here's how it works: If the team that wins has roots reaching back to the original National Football League, the stock market will have a good year. But if the victor was ever a member of the rival American Football League, expect the Dow to get sacked.
Indeed, the Super Bowl indicator was admittedly wrong last year. The victorious New York Giants, which joined the NFL in 1925, defeated the favorite New England Patriots, an indication that the market would rise. Of course, the market did not rise in 2008.
But in both 2006 and 2007, the two teams vying for the Lombardi Trophy both had their roots in the original NFL. In theory, the market would rise no matter who won, and in both years, it did.
We face a similar situation this year, as both the Arizona Cardinals and Pittsburgh Steelers can trace their origins back to the original NFL. Regardless of who wins, the Super Bowl indicator says we're in for a stock market rally.
If either team has an edge, though, it would be the Arizona Cardinals.
The Cardinals are the oldest professional football franchise in the history of the game. They were originally founded in 1898 as the Chicago Cardinals and joined the American Professional Football Association in 1920. Two years later, the APFA morphed into the National Football League, with the Cardinals as a charter member.
The Pittsburgh Steelers, on the other hand, didn't join the NFL until 1933.