Will Markets Follow the G-Men Higher?
The S&P 500 has rallied by an average of 11.5% both times the Giants have won the Super Bowl.
You're going to read a lot of statistics about the impact of the Super Bowl on stock prices. Although there is no logical connection, it's hard to ignore the fact that the market much prefers a victory by National Football Conference teams. Stocks rally over the next 90 days in around 85% of the cases by 9.5%, vs. an average increase of only 1.5% for American Football Conference teams.
But how about returns following wins by the New York Giants?
I watched the fourth quarter unfold from a seat in the Giant's end zone last night in Phoenix, and can only tell you that if the energy generated by the rabid Giants fans around me were bottled and tossed onto the market as fuel, it would truly be strong enough to light the market the rest of the year. The intensity of a live sports event of this type is amazing and well worth the effort and cost to witness and enjoy.
My friends over at Logical Information Machines turned to their amazing database to see if the mood in the markets would be affected. And despite the tough action so far today, the answer is positive.
The Giants have won twice before, in 1987 in Los Angeles and 1991 in Tampa. That's only two examples, but LIM reports that the S&P 500 has shown a very strong bullish edge that peaks eight week later. The S&P rallied in both cases by an average of 11.5%, while the Nasdaq rallied in both cases by an average of 15%.
Two examples isn't something you want to rely on heavily, but there could be a bullish psychological component given that many of the biggest traders in the world are in New York and are Giants fans.
For more on seasonal and historical tendencies and the work of LIM, see my new book, "The New Day Trader Advantage."
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