John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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To: John Pitera who wrote (17549)	1/7/2016 9:45:04 AM
From: richardred	of 33421

Hi John: Ahhh Yes, the very traditional saying. I haven't been watching CNBC lately, but I'll bet Art Cashin has been saying the same thing. I traditionally remember Bob Stovall talking about the Superbowl indicator. I really don't base my investment decisions base on these indicators, but it is fun to see how well they rack up. The Pats won. The AFC team last year and we ended up down a smidgen. However selling in May and go away. I don't think took place last year. I think we really had a great Thanksgiving rally last year and not the traditional Christmas rally. That SB indicator should be coming up soon. Happy New Year. Rick P.S. So how accurate is the Super Bowl indicator? It has been correct in 39 out of 48 years—an amazing 81 percent of the time. And not only does it do a remarkable job predicting the direction of the market, but the returns when an old NFL team wins average an 11.3 percent, whereas the average returns when an old AFL team wins are slightly negative. So should we all sit in front of the TV on Sunday and root for the Seattle Seahawks to win the Super Bowl? Are we convinced the New England Patriots will deflate the stock market? As ESPN football analyst Lee Corso says: "Not so fast, my friend." The explanation is actually very simple. The stock market usually advances (the Dow was up in 35 of 48 years), and an old NFL team usually wins the Super Bowl (34 of 48 years). In fact, the number of times both of these events occurred in the same year was 29. Since 1966, there is a 70.8 percent chance that a pre-merger NFL team wins the Super Bowl, and there is a 72.9 percent chance that the Dow advances in a given year. "The bottom line is that before you buy into some stock market theory, look behind the simple correlation to see if you believe there is an underlying rationale or causality that is plausible."

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