Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Super Bowl Indicator; Did the Right Team Win?

Stock-Markets / Stock Markets 2014 Feb 05, 2014 - 07:01 AM GMT

By: DailyGainsLetter

Stock-Markets

Mohammad Zulfiqar writes: This past Sunday, the Seattle Seahawks won their first Super Bowl with a final score of 43 to 8 against the Denver Broncos. My favorite team, the Dallas Cowboys, wasn’t playing, but I still watched the game, because the ads and half-time show are always fun—plus, it can predict where the stock market is going to go for the year.

Yes, you read that correctly; the Super Bowl is supposedly an indicator of the stock market. The indicator is very simple: whenever a team from the NFC division wins, the stock market increases. If the team from the AFC division wins, then key stock indices decline.


With the NFC-division Seahawks winning the Super Bowl, will the stock market increase in 2014?

Before going into further detail, you have to keep one important factor in mind: the Super Bowl indicator has failed at times.

One example of this indicator failing was in 2008. If you recall, the New York Giants—the team from the NFC—won the Super Bowl game after beating the New England Patriots, but the stock market that year had a complete fallout. Key stock indices like the S&P 500 collapsed more than 35% in 2008.

The indicator failed last year, as well, when the team from the AFC—the Baltimore Ravens—won, but the stock market had a stellar performance. The S&P 500 was up almost 30% for the year.

Having said that, here’s my take on following indicators like this one: the indicator could always fail again this year.

As we have just entered into the second month of trading, we see investors are nervous. In January, key stock indices like the S&P 500 declined about 3.5%. The Dow Jones Industrial Average witnessed a fall of more than five percent. Remember; January is usually a great month for the stock market. This year, that wasn’t the case. Just look at the nervousness of investors through the Chicago Board Options Exchange (CBOE) Market Volatility Index (VIX), also known as the “Fear Index.” As you can see in the chart below, it has increased about 65% since mid-January.


Chart courtesy of www.StockCharts.com

But that’s not all. We are seeing companies on the stock market are also worried. They are concerned about their corporate earnings—one of the main factors that drives the stock market higher.

We just started to hear from companies about their fourth-quarter earnings. So far, 44 companies on the S&P 500 have issued negative guidance for the first quarter of 2013. (Source: “Facebook has 2nd highest revenue growth in S&P 500 Information Technology sector,” FactSet, January 31, 2014.)

When the overall stock market looks fearful, investors should avoid making speculative bets. Instead, look to take some profits off the table if you have accumulated any; at the same time, you might want to raise some cash by selling your losing positions. If the stock market falls further, there will be opportunities. Finally, if you are investing for the long run, you shouldn’t rely much on indicators like the Super Bowl, which have no base in fundamentals.

This article The Super Bowl Indicator; Did the Right Team Win? was originally published at Daily Gains Letter

© 2014 Copyright Daily Gains Letter - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in