Many economic indicators are sending mixed signals, but one stalwart is coming through crystal clear.
And it suggests that U.S. stocks are poised for a strong showing in 2010.
The indicator I'm referring to is the oft-overlooked "Super Bowl Indicator," which as has correctly predicted the direction of the Dow Jones Industrial Average in 34 of the past 43 years. That's an enviable 79% success rate. And between 1967 and 1997, the indicator was correct 28 out of 31 times – a stunning 90% success rate.
Here's how it works: If the team that wins has roots that extend 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.
This year, the indicator will be bullish regardless of the game's outcome, as both the Indianapolis Colts and New Orleans Saints can trace their origins back to the original NFL.
That was also true last year when the Pittsburgh Steelers faced off against the Arizona Cardinals. And the vaunted indicator did not disappoint:The Dow surged 1,912.5 points, or 22.5%, in 2009.
If you were forced to choose, however, you might root for the Colts who were founded in Baltimore in 1953 – 14 years ahead of the Saints. The Colts won four NFL championships (three NFL Championships in 1958, 1959, 1968; and Super Bowl V in 1971) while in Baltimore. Since moving to Indianapolis, they won Super Bowl XLI in 2007.
This will be the first Super Bowl appearance made by the Saints.
News & Related Story Links:
- Money Morning:
Super Bowl Indicator Optimistic in 2009 - Money Morning:
It's Super Bowl Weekend and the NFL, NBA, MLB and NASCAR are Going Long With Foreign Forays - Money Morning:
Why You Should Root For the Giants This Sunday
How about the inidicator yesterday of an across-the-board global decline in equity markets, particularly steep in commodities, on fears of unsustainable debt, a pullback in Britain's quantitative easing and a poor showing in the jobs report?
What do you think that is telling us?
Just what is the indicator? Perhaps the stock market is indicating who will win the Super Bowl instead of the Super Bowl indicating which way the stock market will go. I strongly suspect neither has any influence over the other. If there is a correlation, how do we know which influences the other?
What drivel. This "indicator" equates to an "old wives tale," and indicates only "inadvertence" similar to the olde "indicator" of the January effect and the "Santa Cllaus" rally–all of which are akin to fairy tales.
C'mon people. The Super Bowl is of cosmic importance. It is perfectly logical to assume the most important event in the world influences stock prices. All this talk of commodity prices and quantitative easing makes you sound like all the other stock analysts and money manager who fail to beat the market year after year. ;-)
This is the classic example of correlation versus causation. Just because something appears to be correlated does not mean that one result actually causes the other. Another is the high degree of correlation between ice cream sales—and deaths due to drowning.
Anyone who invests based on this indicator should have a brain wave test.
How can a sporting team move from one city to another?? Let alone more than 600 km away!!
How do alls the Baltimores fans feel about this???
I just saw a black cat while coming out of my home(5th of February). This is my Feb 5th indicator. It has worked fantastic so far. Backtesting this strategy, it has an astonishing 80% success rate. If I did not see the black cat on Feb5th each year, the stock market rose that year! Any comments? I think you ought to include it in your trading system!
Hail Money Morning for this stupid nonsensical article!!
How about about Obama trillion dollar budget indicator. Does it speak any ?
Geez, lighten up boys. Can't you enjoy a little less serious article now and then. I know it was a bad week but turn off your computer and enoy the game,
Anyone invest in the (bet on the) Superbowl game. Just as in the markert there are Sportsletters with analysts touting all sorts of stats to predict the outcome of any particular sporting event. Remember anal is 57% of being an analyst