This time of year, it seems, we read about two so-called patterns in the market—"As January goes, so goes the rest of the year" and the "Super Bowl Indicator" of the stock market. While these two may not seem related, they actually are.
The Super Bowl Indicator, which predicts what stocks will do based on the outcome of the game, is riding a six-year winning streak.
Since the advent of securities trading, investors and market commentators have looked for patterns in returns. In essence, investors want to take a complex system—the stock market—and simplify it. The Holy Grail of the investor is a simple trading rule that magically unlocks the complexities of the market.