Superstitious stock-market investors will be glued to their computer screens Monday, searching for omens among arcane trading data that might signal the winner in the next day's presidential election.
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One of the most widely followed signs remains unclear: The performance of the benchmark S&P 500 in the three months leading up to the vote.
The benchmark S&P 500, which has predicted the winner of 87% of all presidential elections and every one since 1984, has slipped 0.35% from July 31 through Friday. The key level to watch for Monday's close is 3,271.12.
Typically, a decline has signaled victory for the challenger while an increase signified the incumbent would remain in power, though not all traders buy into that belief.
"In order to draw any conclusion, you need a certain amount of data," said Blair Hull, chairman of Chicago-based Hull Tactical Funds. "The number of elections we've had is such a small number that I would completely discount that."
As traders debate the accuracy of the S&P 500's prediction and other less-popular indicators, hoping for a money-making edge, one thing everyone agrees on is the extraordinary amount of uncertainty priced into the market.
Volatility contracts, which are already trading at elevated levels, indicate the market expects even greater price swings between now and the inauguration.
Contracts that expire on Wednesday, the day after the election, are trading at 37. Volatility remains elevated, near 38, for the few days after the election before dipping into the low 30s in December.
Instruments stretching through the Jan. 20 inauguration, meanwhile, are all trading higher than contracts that expired on Friday between 23 and 24. Volatility typically trades in the high teens during periods of calm.
“The market fears uncertainty more than anything,” Anthony Saliba, CEO of the Chicago-based Matrix Execution Group, an executing broker-dealer that specializes in options and equities, told FOX Business.
The hump in volatility pricing suggests we’re “probably going to have a contested election,” he said, pointing to a flood of mail-in ballots in key battleground states North Carolina and Pennsylvania that can be counted for up to nine days following the election.
Even after the votes are tallied, the possibility exists of an event similar to the Bush-Gore recount in the 2000 election where the outcome is effectively decided by the Supreme Court.
“Unless you get a landslide, I think that happens this time,” Saliba said.
Hull, meanwhile, thinks the market is “anticipating too much uncertainty” and that this could be one of those instances where “everyone is caught off guard" and a winner is determined on Election Day, or soon thereafter.
No matter who wins the election, one thing is for sure, according to Hull.
“There's no information about whether a Democrat or Republican is going to create greater returns,” he said, citing data going back to 1900.