Super Bowl Indicator 2010

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The super bowl stock market predictions usually start circulating this time each year. There is statistical evidence that ‘states’ that if a team from the AFC wins the Super Bowl the stock market will decline during the year and if the NFC team wins it will be a positive year for the stock market.

This means for 2010, if the New Orleans Saints win Super Bowl XLIV on 7 February the stock market will rise this year. However, after an impressive throwing display by quaterback Manning, Indianapolis Colts may have something to say about that as they won the AFC. Obvioiusly a win for them would put a nagtive slant on 2010’s stock market out look.

Obviously statistics are only statistics after all and nothing is set in stone but this ‘theory’ has had an 80-85% accurate strike rate. Something we wish all trading systems had.

In addition there is a 90% probability that the stock market performance in Januray dictates the performance for the rest of the year. i.e a positive January means a positive year.

So far (as of the 26th Jan 2010) the stock markets are down since the start of the year and should the Colts win the Super Bowl in few weeks time I wouldn’t bet against a negative year.

But maybe there is a play to have before then? Should January end up negative for the month maybe it is a sign that the year will end down and that it maybe predicting a Colts win.

As always, when stats and numbers are used they can always be manipulated to tell the story the way you want. Had you traded the super bowl stat over the last 10 years you would be hanging a round breakeven on wins v losses. However on actual profit and losses you would probably be running a loss had you bough and sold every year depending on the Super Bowl result.

But as with anything in order to take full advantage of a statistical edge you have to be able to trade more than one trade, especially when trading something that on the outside has no apparant ‘real’ connection to what it is predicting. Either way I think it presents a bit of fun for us traders and NFL fans alike during Januray when everything else in the world seems a bit dull.

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