Thursday, October 02, 2008

Poll trends

This has nothing to do with the stock market, but I'm interested to see if trend lines can be as predictive in election polls as they are with stocks.

The 2008 Presidential election polls - as computed by the Real Clear Politics website - do indeed seem to be following trend channels. Barack Obama's average poll numbers (blue) have been rising about 3% per year, in a channel about 5% wide. John McCain's major trend channel (red) is almost 8% wide, and has also been rising at a rate of 3% per year.

On shorter time frames, McCain's average poll numbers have formed two sub-trends. (yellow) A declining tops pattern began in January and was broken just after the conventions. A second rising bottoms pattern began at the end of June, and McCain's latest poll average is now sitting right on that line.

If I can apply the same rules to these trends, then I think next week could decide how tight the election will be. If McCain's ratings bounce off of the new rising trend line then it would confirm that McCain and Obama are in the same neighborhood, and would make for a close outcome. However, if McCain's average numbers fall below the trend line at 43%, then that would bring the long-term 8%-wide channel back to life and give Obama the clear edge.

Maybe I'm crazy to even try this, but there's no denying that poll numbers and stock prices are both determined by news-driven decisions of millions of emotional people. We'll see in a month.

6 comments:

linc campbell said...

Can I short McCain/Palin?

Jody said...

As a matter of fact, you can.

Tim said...

Jody

Fascinating blog sir. Anyways I wanted to ask that based on your research how long do bear markets typically last? The last one 2000-2002 lasted almost 2 years give or take a few months. Thanks

Cathy said...

Who? Me?

Emotional!!!!!?????

Jody said...

Tim,

Yes, in fact most bear markets lasted around two years.

Jody said...

Cathy,

It's only the people who aren't sure who they're going to vote for who create the swings in the polls. Just as in the stock market, "buy and hold voters" don't have an effect here.