Trade Sports update on November 2006--posted by Tony Garcia on 9/05/2006
It is time for the recurring review of what investors are saying for the November elections.
The last time we checked in on TradeSports (about a month ago) the odds of the GOP holding the Senate were at about 83% and holding. That remains true...the odds are at 80% with very strong support. Translation: being about 2 months away the horizon is very good for the GOP and maintaining the majority in the Senate.
The GOP was barely holding its head above the 45% chance line (above which the event is considered a coin flip's chance). The downward trend on their chances, however, has continued and is now at 40%. It is continuing the downward trend and (investors will understand this) there is substantial resistance currently preventing a run up above 45%. Translation: there is a growing chance, according to those putting their money up, that the GOP will lose the majority in the US House.
Two months ago Kennedy's chances were hanging by a thread to stay above 45%. Last month the chances fell to 20% and this month the bottom continues to fall out...according to the investors. The hard part is there are people reporting polls showing a narrowing of the gap between Kennedy and Klobuchar. I believe polls are worth less (regardless of what they are showing) than looking at the money so, if I were forced to listen to one or the other (polls or TradeSports) then I choose TradeSports. The good news for the Kennedy camp is there is little support or resistance which means the chances could change suddenly and quickly for little reason.
Consistency in the odds. That is the report here. Since late January Pawlenty has been above 55% (the upper range where the odds are a coin-flip chance). He has been above 80% chance of victory solidly since 1 August. The silver lining for Kennedy is the same rain cloud for Pawlenty: there is little support or resistance which means the chances could change suddenly and quickly for little reason. That said I think, barring some major something-or-other, Pawlenty should begin booking places for his re-election inaugural balls.
I hope to check in on these a little more frequently.