The Technical Approach to Stock Market Timing: An Objective Analysis and Evaluation
economics, stock market timing, analysis and evaluation, market timing systems, gridiron method
Behavioral Economics | Economic History | Economics
Innumerable market timing systems have emerged throughout the history of the stock market; some are reasonable and others are absurd. One fascinating plan in the latter category is entitled the gridiron method. It goes something like this:
"If, in any year, the loser of the Harvard-Yale game fails to score, that is a buy signal for the succeeding year unless there is no difference between the points scored by California in the Stanford game and those scored by Army in the Navy game. The selling is easy. Just sell the year after California beats Stanford. To know exactly when to buy or sell if a signal has been given, add the scores of all six teams, divide by 9 (disregarding fractions) and add 2. If the result is less than 3, call it 3 and if more than 10, call it 10. The answer is the month of the year in which to act, obviously always between March and October."
If this preposterous formula had been followed from 1920 to 1940, it would have produced a profit of approximately 600 points in the Dow-Jones Industrial Average and only two small losses. Anyone, such as the author the Gridiron method, is capable of studying historical price movements and using his hindsight to link them with some other phenomenon, thereby creating a market indicator.
Cameron, R. G. (1963). The Technical Approach to Stock Market Timing: An Objective Analysis and Evaluation (Undergraduate honors thesis, University of Redlands). Retrieved from https://inspire.redlands.edu/cas_honors/935