The Superbowl Indicator


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I know this might mean a bad year in the stock market for 2008, but I’m pulling for the Patriots in the Superbowl. Sorry. I’m a New England boy. Gotta pull for the home town team. Although, I do have to admit I would have majorly split loyalties had the Cowboys been able to make it to the title game. They are the team I’ve routed for since the 70s when I first started watching football. What can I say? Blue was my favorite color and that was the color they were wearing that day. I was a kid.

But back to the stock market.

The old saying goes that when an old NFL team wins the Superbowl the stock market is up while when an old AFL team does, it’s a down year. This is the so-called Superbowl Indicator.

Of course there’s basically no causal connection between one football game and the stock market – at least not one that anybody’s ever been able to outline in a reasonable fashion. This is just one of those weird coincidences we see sometimes, even if it’s been right something like 80% of the time.

That’s why I’m sorry for all you stock market bulls. You see, the Patriots are an old AFL team, so if they win then it would seem the bears will be in charge for 2008. Although, January already saw stock market losses good for a year, so maybe the market could actually rally for the rest of the year – a little anyway – and we’d still fulfill the criteria.

So long as the Pats win, I’ll be happy. Besides, I trade the markets both long and short, so it doesn’t matter at all to me. :-)


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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
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  • rene

    I don’t believe the Superbowl as an indicator of how the stock market will do for the year. The Pats won in 2004 and 2005 and the Steelers won in 2006 and the markets were up during those years. Of course, the Pats could win this year and the stock market may very well end down for the year.

  • http://www.theessentialsoftrading.com John

    Rene – Of course you should not use the results of the game as an indicator. There’s no causal relationship at all. It’s just a quirkly little statistic.

    That said, be careful about assuming that just because something has or has not happened recently it will or won’t in the future. Traders have a tendency to weigh recent events more strongly than past ones, usually to their detriment.