[Market Outlook] Elevated Risk

What Might Cause Market Weakness? [Company Logo] Elevated Risk What Might Cause Market Weakness? By Keith Schneider and Donn Goodman [image] Gaugers, I hope you are having an enjoyable weekend and getting ready for the BIG SHOW… the Super Bowl. This has become a National holiday filled with gatherings and elaborate parties, and now that betting is legal in at least 33 States, a good wager. One of our MarketGauge employees (and a major contributor to our strategies) has ties with the upper management of the Philadelphia Eagles. So I am pulling for the Eagles. However, Mish and Keith are involved in a bet placed on Kansas City before the start of the season. So I guess I am also pulling for them. Who Should You Be Rooting For? Quite a few studies have been done about the correlation between the Super Bowl winner and the stock market’s performance. This began in 1978 when a sports writer was evaluating the correlation between what leagues the winner came from and that year’s stock market performance. The original thesis showed that the market benefitted most from the winner coming from the original NFC (National Football Conference). The correlation fell apart over the years, but interestingly there is some long-term stock market better performance when an NFC team wins. A winner in the NFC has generated an average stock market return of 10% for that year following the Super Bowl. And, if an American Football Conference winner triumphs, the average return is 6.9% for that year. I guess we should all hope that the Eagles are crowned the champs. For more exact information, I am using The Carson Group, Ryan Detrick’s more thorough analysis that follows; [image] With the above information, root for the Eagles! But wait, recently (not the long-term average) the wins by AFC teams have been most bullish for the markets. [image] Well, I guess with this information, you should join Keith and Mish and root for the Chiefs. Or better yet, just root for a blow out. That seems to contribute additional excess return to the stock market. See below: [image] How did your team do? See below for specific team information and how the stock market fared after their Super Bowl win. Notice not much happened with my team, the Cleveland Browns… why? Because they have NEVER been in the Super Bowl. [image] We May Learn More About The Economy From the Super Bowl Ads. Between the action on the field between the Chiefs and Eagles will be all the ads that constitute a big part of the “Super Game,” at least for people watching on TV. This year the cost of a commercial is around $7 million for a 30-second spot, about three times what it was in 2007 (talk about inflation). That comes despite a significant drop in television viewership. Most advertisers, however, feel it is a good deal for them especially given the cultural impact their messages have evolved into. Last year’s ads and the messages they conveyed were probably more telling cues about what would unfold in the stock market during 2022. For example, Larry David was skeptical about the now-collapsed cryptocurrency company FTX. Additionally, some financial reporters dubbed last year the Crypto Bowl for all the ads that featured digital currency or the new exchanges and brokers that could facilitate your potential investing. These ads ran right before the cryptocurrency crash and the elimination of a trillion dollars worth of the coins’ market value. Other major advertisers included Disney for its streaming service. Its stock hit an 8-year low in 2022. Gambling app DraftKings lost about half of the value of its stock by the end of 2022. Carvana dropped by 97% in value by the end of 2022 and is teetering on a possible bankruptcy. And who can forget that E-Trade (now owned by Morgan Stanley) returned with the baby after a long hiatus from advertising at the Super Bowl. [In the commercial](, the baby agrees to be whisked out of retirement by helicopter upon hearing that “people have their money just sitting around doing nothing.” Not very timely, considering that sitting in cash doing “nothing” would have been a desirable strategy for most investors at the time. [image] So watch the ads, as they may tell you plenty about what companies and what stocks to be cautious about in 2023. The Win Streak Was Broken After 5 straight weeks of up market performance in the major index averages, they all closed lower with the small caps (IWM) down the most at -3%. The tech heavy Nasdaq (QQQ) closed down -2%, and the S&P 500 fell the least, -1.0%. The market has had an impressive move from the October lows, and the recent acceleration of the rally was welcome. But will it continue? We have no idea. Even though our Gauges have shown Risk On, there is some apparent weakness in the technical indicators. See more of this in the bullets below. Click the links below to continue reading about 8 conditions and indicators that suggest the market’s current rally is facing elevated risks and review the weekly Big View bullets and video analysis. [Click here to continue to the FREE analysis and video.](=) [Click here to continue to the PREMIUM analysis and video](). Best wishes for your trading, Keith Schneider CEO, MarketGauge Donn Goodman CMO, Market Gauge Asset Management P.S. When you’re ready, here are 3 free ways we can help you reach your trading goals… - [Book a call with our Chief Strategy Consultant](), Rob Quinn. He can quickly guide you to the resources that you'd like best. - Get the foundational building blocks of many of our strategies from Mish's book, [Plant Your Money Tree: A Guide to Building Your Wealth](, and accompanying bonus training. - [Review quick descriptions]() of our indicators, strategies, services and trading systems here. Get more - follow us here... Twitter [@marketgauge]() and [@marketminute]() and [Facebook]( To stop receiving this go [here.](=) Got Questions?Office hours 9-5 ET (New York time) Email: info@marketgauge.com Live Chat: Go to bottom right corner of our [home page.](=) Call: 888-241-3060 or 973-729-0485 There is substantial risk of loss associated with trading any securities including and not limited to stocks, ETFs, futures, and options. Only risk capital should be used to trade. Trading securities is not suitable for everyone. No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past performance is not necessarily indicative of future results. To unsubscribe or customize your email settings, [click here](). "Market Intelligence at a Glance + Tools For Serious Traders" [Unsubscribe]( MarketGauge.com 70 Sparta Ave, Suite 203 Sparta, New Jersey 07871 United States (888) 241-3060