Millions of Americans were excited about the big football (American
football) championship game between the New England Patriots and Philadelphia
Eagles last evening. The Superbowl Indicator is watched by traders as a novelty; no one puts
money on it but it is something fun with a surprising positive track record.
Simplifying the indicator, since football teams have changed
leagues over the years, if the American Football Conference (AFC) team wins
(Pats), the stock market should have a bad year. If the National Football
Conference (NFC) team wins (Eagles), the stock market will have a great year.
Ironically, the Superbowl Indicator has a track record of
about 75% correct. However, the indicator has struck out the last two years.
The Pats won the Superbowl last year but the stock market printed one of the
best years ever. The year before that the Denver Broncos took the top prize, another AFC team, but the stock market rallied that year as well. Humorously, the
central bankers are the third man on the field.
Thus, take the Superbowl Indicator with a grain of salt.
Nonetheless, the stock market bears wanted a New England win while the
bulls wanted Philadelphia to take the top prize. The big game was very exciting.
The Philadelphia Eagles defeat the New England Patriots
41-33 and receive the coveted Lombardi Trophy. The NFC team wins so the
Superbowl Indicator predicts the stock market should be bullish this year. Bears moan. Bulls cheer. The Superbowl Indicator, however, is not helping the US futures that remain negative. S&P -16. Dow -213. Nasdaq -38. Russell -12. VIX 18.69. The VIX is at the highest level since November 2016.
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