The Super Bowl Trading Strategy- Bullish Or Bearish For Stocks And Bonds? (Seasonality, Indicator)
Given that the Super Bowl is such a big event for Americans, can we spot any seasonal trends before and after the event? Is the Super Bowl bullish or bearish for stocks and bonds? Is there a Super Bowl indicator?
The stock market performs best after in the days after the Super Bowl final with abnormal gains – much better than any random period. Thus, the best Super Bowl indicator is the date of the final.
Let’s find out and run some backtests:
What is the Super Bowl?
The Super Bowl is the annual championship game of the NFL, played on the second Sunday in February. The winning team is awarded the Vince Lombardi Trophy.
The Super Bowl is the championship game of the National Football League (NFL), played between the champions of the American Football Conference (AFC) and the National Football Conference (NFC). It is the most watched sporting event in the United States and one of the most watched sporting events in the world (however, as a European, does anyone really care outside the US?).
The Super Bowl is played on the second Sunday in February each year. The winning team is awarded the Vince Lombardi Trophy, named after the legendary Packers coach who won the first two Super Bowls.
The Super Bowl is more than just a football game. It is a cultural event, with millions of people tuning in to watch the game and the halftime show. The Super Bowl is also a major advertising event, with companies spending millions of dollars for commercials to air during the game.
However, there is no holiday or non-trading day in connection to the day.
The Super Bowl Indicator
This article must not be confused with the Super Bowl Indicator:
If a team from the American Football Conference (AFC) wins, it is said to be a bearish sign for the market, while a victory by a team from the National Football Conference (NFC) is considered bullish.
This is, of course, a spurious correlation, but it has held up remarkably well, even after it was “revealed”. To read more, please click on this link:
Super Bowl seasonalities and effects
Let’s look at three different backtests: