In comparison, the technical side looks not at that key financial information that should and eventually does drive prices, but rather the past patterns of those prices that repeat over time and potentially provide a roadmap for the direction in which they are moving . Technicians regularly study charts that show price movements over many years to identify “resistance levels” or “head and shoulders” formations that signal it is time to buy or sell.

For example, a company can have a string of great earnings, have a low P/E relative to its peers, enjoy the tailwinds of a thriving industry, and yet its stock is in a rut – so it looks like a bargain when it comes to fundamentals. But a chart expert might note that when this name flattens out, its shares usually suffer a shock and decline in the coming days or weeks. The company's promising prospects and cheap valuation are enticing fundamental investors to buy. The scary price action in the past is pushing the technical crowd to sell or short. To put it simply, it is an investment scenario where the fundamentals and technicals contradict each other.

The positive campaign that Harris runs usually wins, but she is behind

Even in presidential elections, fundamental and technical analysis are the two most important methods to influence the outcome. The basics include the type of campaign the candidates are running, from radical to centrist, the economic circumstances at election time, information about the campaigns, and how the candidates impress voters with charisma and credibility. The technical data can be divided into two categories: the polls and the political prediction or betting markets. In finance, the two metrics, although usually in harmony, are often at odds with each other. But in presidential elections, the two are almost always aligned — and for one simple reason. For many decades, the candidate who masters the basics almost always tops the polls and dominates the betting odds. Historically, fundamentals drive technicals, and candidates' strategies and personalities exert a strong pull on polls and betting prices.

But in the race for the White House in 2024, the fundamentals and technology are completely out of control. “We have never seen a discrepancy like this in a modern presidential election, or perhaps a presidential campaign,” explains Thomas Miller, a data scientist at Northwestern University. Miller relies on technology; He bases his forecasts on the betting or prediction markets, standards that he considers to be far more reliable and up-to-date than the surveys. But he's still amazed at what his numbers suggest, where the messages on the ground suggest they should be, and why the fundamentals and technicals tell completely different stories.

His conclusion: Harris is taking the course that has almost always won in the past. So the fundamentals show that it should be heading to victory on November 5th. Trump has chosen a path that almost always loses. But technically speaking, he is way ahead.

This scenario is confusing, Miller says, because the vice president inherited almost all of the ingredients for success. “Their approach is upbeat, upbeat and inclusive. It offers unity, not division,” notes the dedicated technician. “The vice president also positions herself in the center-left political spectrum. Traditionally, these two strategies have always proven winners.” In contrast, Miller sees Trump as selling the overly negative view that America faces a bleak future under any leader other than himself, and portrays our current economic situation as apocalyptic, while the actual data on growth and employment are quite positive. “The Republican message was a dark and anti-immigrant message, peppered with derogatory comments about Harris,” Miller said. “Trump vows to take revenge on his opponents if he wins the 2024 election.” For Miller, Trump represents a far-right agenda and an attitude that is far from mainstream and has always spelled doom in the past. As a prime example, he cites the Johnson-Goldwater race of 1964, in which the Republican led a radical conservative and the incumbent favored the kind of moderately liberal policies that Harris supports today. Goldwater, Miller said, suffered the worst Republican losses in sixty years, receiving only 52 electoral votes (EVs).

Although Miller is a technician, he greatly admires the work of arguably America's leading forecaster in the fundamentalist camp. Allan Lichtman, a professor at American University, has called nine of the last ten presidential elections, only missing the Bush-Gore contest in 2000 (which he claims Gore only lost because of the votes in Florida, the state above it decided were counted incorrectly). race for a few hundred ballots). Lichtman uses a system he calls “the thirteen keys to the White House.” For example, the incumbent candidate checks whether he is not facing primary challenges, has made a major change in domestic policy, has had major success on the international stage, has benefited from an economy that was not in recession at the time of the election, and showed great charisma.

If an incumbent candidate captures 7 or more keys, victory is imminent. The challenger must collect at least six points to win. Lichtman gives Trump only four keys, including Harris' lack of appeal and a major foreign policy failure, particularly the conduct of war in Israel, Lebanon and Iran. Lichtman is not impressed by the extremely close poll results and the high betting odds in favor of Trump. He stands by his prediction that Harris will win. He considers both technical measures to be extremely unreliable. He warned in interviews that polls significantly underestimated the Democratic vote in the 2022 midterm elections and that polls and betting sites vastly underestimated the support Harris will enjoy on Election Day.

Why the technical and fundamental analyzes of the election look so different

What explains this apparent gap between technical and fundamental data? In part, Miller said, it is simply a departure from the normal national mindset, in which voters prefer relatively centrist, worthy candidates who offer an uplifting vision, as America is now a bitterly divided nation. But he points to another reason: the way Lichtman defines the short-term economic situation. Miller says that while the macroeconomic numbers look good, Americans aren't feeling good, so the situation that normally helps the party in the White House is now doing the exact opposite and placing a heavy burden on the vice president. “The message from the Democratic Party is that GDP is growing strongly, unemployment is low and inflation is falling,” he explains. “They put all these good indexes in the spotlight. But most people don't think about GDP or the fact that prices are no longer rising as quickly as before. They think about how they have to work two jobs to make ends meet, or that their grocery bills have skyrocketed under Biden, and that they have no savings and can't afford a mortgage because of high interest rates Buying your first home or business in an old car for a new one.”

“If nothing significant changes in the race, Trump will win,” Miller told me. “That will only change if there is a massive turnaround. I'm not happy about it. I would like to see a turnaround. The country would be better served. But I am a data scientist. My forecast must be based on the data. Right now it looks like a Republican victory, and perhaps a strong one.”

However, on October 28, PredicitIt prices narrowed slightly towards Harris. The reason may be the overheated rhetoric at the six-hour Trump rally at Madison Square Garden in Manhattan the night before, where a comedian on stage referred to Puerto Rico as a “floating sea of ​​trash,” a blast that could seriously jeopardize Trump's hitherto successful outreach to Hispanics voters. As Miller notes, this gift to Harris may be too little, too late, considering voters only have seven days left to change their minds. Still, this race was a roller coaster ride, with each candidate quickly rocketing from the dumps to the top. The fundamentals that almost invariably determine our presidential elections still favor Harris. Allan Lichtman, an excellent forecaster who is almost always right, is limited to the basics. Another great forecaster who admires Lichtman's work, Thomas Miller, sticks to the technical facts. We won't know until late November 5th at the earliest which of the two models, almost always in agreement and this time in strong conflict, will prove correct.