Wednesday, 26 January 2011

Super Bowl Set - Go Long

Things are looking up for the Stock Market this year. The famous Super Bowl Predictor maintains that if the team that wins the Super Bowl has its roots in the original National Football League, the market will increase. If the winning team was originally from the old American Football League, the market will decline.

This year there is no doubt about the outcome, and we should all load up on shares. The reason is that the two teams this year, as indeed was the case last year, both trace their roots to the original National Football league. The Green Bay Packers have won three times previously, with the Dow Jones Industrial Average rising an average of 14% in those years, while the years when the six-time champion Pittsburgh Steelers won have seen a rise of an average of 18.4% .

This indicator has correctly predicted the direction of the Dow in all but nine of the 44 years that this game has been played, which works out to a success rate of just under 80%.

While this idea may seem nonsense, there is one logical reason why it may hold true, which is mass psychology. If enough people believe the market is going in one direction or another, they will collectively turn this belief into a self-fulfilling prophecy.

Perhaps the fact that the US Stock Markets were up big on the first trading day after the Super Bowl teams were known, is a sign that traders think that this will be another up year for stocks.

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