Risk Latte - The Superbowl Indicator and Stock Market Forecast

The Superbowl Indicator and Stock Market Forecast

Rahul Bhattacharya
Feb 04, 2005

Apparently some technical analysts use an indicator called Super Bowl indicator to forecast the stock markets. This indicator predicts how the stock market will perform based on which team wins the Super Bowl. Apparently, a victory by NFL team predicts a bull market in stocks whereas a victory by a former AFL team is bad news for the investors.

Again, apparently, the Super Bowl indicator has been correct 29 out of 36 times, which represents a success rate of more than 80%.

In 2002 the New England Patriots (an original AFL team) defeated the (NFL) Saint Louis Rams and the market responded correctly by falling sharply. The indicator has however failed a couple of times in the recent past.

This illustrates that sometimes it is possible to correlate two completely unrelated and random events.

(Referenced from A Random Walk Down Wall Street by Burton G. Malkiel)

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