8 weird financial indicators

Freaky or flaky?

The Super Bowl Indicator:

• This is a superstition that suggests the stock market’s performance for the year can be predicted based on the outcome of the Super Bowl. The theory states that if a team from the original National Football League wins, the market will have a bullish year, and if a team from the old American Football League wins, the market will be bearish.

The Hemline Index:

• Proposed by economist George Taylor in the 1920s, the Hemline Index suggests a correlation between the length of women’s skirts and the performance of the stock market. The idea is that skirt lengths rise and fall with the stock market’s movements.

The 9/11 Stock Put Options:

• In the days leading up to the 9/11 terrorist attacks, there was an unusual surge in the purchase of put options on stocks of American and United Airlines, the two airlines involved in the attacks. Some have suggested this could be indicative of insider trading related to the impending tragedy.

Monday Effect:

• The Monday Effect refers to the phenomenon where stock prices tend to be lower on Mondays than on the preceding Friday. Some attribute this to negative news over the weekend or investors’ psychological factors.

January Indicator (January Barometer):

• This theory suggests that the stock market’s performance in January can predict its performance for the rest of the year. If the market is up in January, it’s believed to indicate a positive year overall.

Presidential Election Cycle Theory:

• This theory posits that the stock market follows a four-year cycle corresponding to the U.S. presidential election. The third year of a presidential term (post-midterm election) is often considered the best for stock market performance.

Sports Wins and Stock Market Performance:

• Some studies have claimed that when a sports team from a particular city wins a major championship, the stock market in that region tends to outperform.

Solar Cycle Theory:

• Some market analysts have explored potential correlations between solar cycles and financial market trends, suggesting that solar activity might influence investor psychology.

Some of these do hold up. Presidential election cycles and sports wins do buoy the economy up. Most of these however don’t. Verdict: Flaky.