With the return of more “normal” market volatility, everyone wants to know what will happen next. And while no one can say for sure, over the years folks have come up with some amusing if unreliable predictors. While these cannot be taken seriously, here is a run-down of three of the most interesting.
1) The Super Bowl Indicator
This superstitious idea originated in the 1970s and posits that if a team from the American Football Conference wins the Super Bowl then there will be a bear market to follow, but if a team from the National Football Conference wins then there will be a bear market. Up to January 2017, this “indicator” had been “correct” 40 out of 50 times as measured by the S&P 500 Index. Since there is assuredly no connection between the two, this is pure coincidence and not a true predictor.
2) The Hemline Theory
The “hemline index” is attributable to economist George Taylor. In 1926 he posited that women’s hemlines rise along with stock prices, citing the abrupt drop in women’s hemlines following the 1929 Wall Street Crash. This has never received peer-reviewed commentary, however, socio-biologist Desmond Morris addressed it in his book Manwatching.
3) The Skyscraper Curse
This idea originated in 1999, and put forth the idea that the world’s tallest buildings have risen just prior to economic downturns. While it is true that there may be a correlation between the business cycle and skyscraper construction, this is another untrustworthy indicator.
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