Oddball Indicators Paint Mixed Picture
NEW YORK (TheStreet) -- According to the Stock Trader's Almanac, since 1950, January has accurately predicted the year's outcome with a more than 80% accuracy ratio. If the S&P 500 remains positive for the full month of January, the rest of the year has usually brought a steady increase. The so-called "January Barometer" has a better record during years when midterm elections take place. Still, regardless of whether or not a midterm election took place, the January Barometer has an 89.1% accuracy rate. With a down January in the books, the January Barometer forecasts a down year for 2014, unless this year falls into the 10.9% of the years since 1950 when the January Barometer has been wrong.
The Super Bowl Indicator: Buy
Another superstitious stock market indicator with a highly reliable record is the widely-popular Super Bowl Indicator, which tells us whether the stock market will be bullish or bearish for the year. Strangely enough, the Super Bowl Indicator has a success rate of approximately 80%, despite the fact that its basis has nothing to do with stock market statistics, economics or business. Nevertheless, this indicator enjoys better results than those obtained by most hedge funds or mutual fund managers.
The Super Bowl Indicator is based on the premise that if the winning Super Bowl team comes from the original National Football League (back when there used to be a separate American Football League, from 1960-1969), the S&P 500 will be bullish for the rest of the year. The AFL was founded by a number of owners who had been denied NFL expansion franchises. In 1970, the ten AFL franchises were merged into the NFL, where they became known as the American Football Conference.This year, the Denver Broncos -- one of the original ten AFL teams -- lost the game and the Seattle Seahawks -- a National Football Conference expansion team in 1976 -- won the Super Bowl. Therefore, according to the Super Bowl Indicator, the S&P 500 should be bullish for the rest of the year.
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