Last Friday the market seemed to be resting in place even though options expiration could have caused some fireworks. The market was quiet while the volume was a little better than it had been all week, it wasn’t that much better.
Super Bowl Indicator:
According to Erick in one of his comments last week, the real market direction will be determined by the Super Bowl winner. His Colts did win this evening putting them into the Super Bowl along with the Cinderella Bears who flooded the Saints (can we say that?). The theory he is referring to is the one that says if the Super Bowl is won by an AFC team the market has a high probability of going down and if an NFC team wins, the market should go up.
There is a problem with his theory however. The indicator has had to be adjusted to go back to the early days of the current AFC and NFC splits and according to these “rules” the Colts are Not considered an AFC team for the purposes of the Super Bowl Indicator. The bottom line is that neither the Bears nor the Colts are considered AFC teams so no matter which team wins, the Super Bowl Indicator is now Completely determined to be bullish this year. But, we can take comfort in knowing it’s only 80% accurate, ouch.
Anyway, this looks to be a good Super Bowl with two very different styles of play going at it in a few weeks. We are pleased to see these two teams are playing.
We are beginning to see earnings being released for the quarter. Last week saw some negative reactions to pretty good news or what looked like pretty good news on the surface. We’ll see how this week’s earnings news plays out.
Upcoming Week’s Major News Items:
December Leading Indicators—Monday
Conference Board Consumer Confidence—Monday
ICSC Store Sales Index—Tuesday
December Existing Home Sales—Thursday
December Durable Goods Orders—Friday
Dow Industrials: 12,565.53 -2.40