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Hemlines of Brazil

April 18, 2008

There is something about Brazil, which is exotic. Passionate. Hot!

Take the football for example.

Passionate people playing it with hot chicks swaying in the stands!
Oh! how I love the game! [my interest only in the chicks though!]

I can well imagine, hot-shot traders like me [okay, let me assume], not in the distant past, squaring up skirts and stocks with a keen eye .After all, as Ajit Dayal says valuation is like beauty. It lies in the eye of the beholder.

So when Ralph Rotnem casually noted about rising hemlines and rising stock quotes, he did at least capture some of the technical traders imagination.

Hemline indicator, is definitely the sexier of the market indicators. With drab charts and calculators peering from the computer screens I think, hemlines can relieve quite some sore eyes. So to take a deserved vacation from charts, I said “hello!” to Brazilian fashion.

And boy! was I stunned. But before I talk about the Brazilian girls and their fashion, let me speak something about hemline indicator.

It is not an indicator per se, as you expect a volatility indicator with precise values and a thumb rule of when to enter and when to exit and things like that! Like all other socio-economic indicators, this one too is a qualitative indicator. So what does it say?

With rising hemlines of skirts, the socio economic mood also rises and thus signalling a bull run. And vice versa.

Shrinking hems= Bull Run leading to Micro Minis [extrema]

Falling hems=Bear Run leading to Maxi style[extrema]

So when the two extreme dressing styles are widely and hugely accepted by the masses, then it normally signals a trend shift.

Armed with this knowledge, I thought of finding out about Brazilian socio economic mood via their fashions [and of course girls!], I found something stunning [girls included!].

The hemlines has been rising for quite sometime. Check out Adriana Lima’s outfit from Sao Paulo Fashion Week 2001 and the Dragao Fashion Week just concluded in first week of April 2008.

[<— 2001]


No point for guessing though which one is an indicator of a more bullish phase.

[You can even check the same thing out here in India too, though.]

There is one theory behind this apparent transformation. It is this that with increasingly upbeat social mood, there is an increase in optimism in the society. This optimism directly spills out into joy, boldness and social experimentation. So this ‘boldness’ exhibits in rising hemlines of skirts. And this goes on rising and rising and rising till it reaches, basically the micro mini skirt levels [sigh!]… at that point it is a strong sell indicator. Why?

Bacause the hemline will again start increasing, because of the falling social mood. It is one of the signals to say, Stop! this nonsensical “feel-good”. Its time to start frowning.

One apparently good reason to believe is the return of the long hemline skirts into fashion tastes in US. Or have a better look at the maxi trend on the rise here and here [both must follow links] … This is in US though and I assure you, if you land with one such hideous thing on streets of Europe, Brazil or India, you will be taken as a perfect example of wardrobe malfunction.

Coupled with this, we have something else, in US the trend of transparent clothes have started catching. So don’t you think you should start selling?

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2 Comments leave one →
  1. April 18, 2008 12:46 am

    Nice writing style. Looking forward to reading more from you.

    Chris Moran

  2. Soham Das permalink*
    April 18, 2008 9:50 am

    Thanks Chris… 🙂 , business can be funny you know… 😉

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