We obviously won't know the answer with absolute certainty for another 3 1/2 weeks, but market data gives hints of a looming collapse in market impressions of Democrats prospects for holding the House and perhaps the Senate.
In the House, our model presently suggests that Republican prospects for House control have increased to over 75% and a projected seat total of 228 -- or a 51 seat gain from the 177 seats they held following the 2008 election.
On the Senate side our macro level model is pointing to Republicans holding 49.1 seats; our micro model is projecting a range of 48.0 to 48.9 seats. Both models still assign probabilities of under 25% for Senate control.
The fact that the market is assigning a higher probability to neither party controlling the Senate than Republicans is a clear indication of the tipping point that exists. Every time it appears that momentum is heading towards Democrats (California, Connecticut, Delaware), someplace else prior gains are lost (Nevada, Washington).
The Republicans have seen the distribution of Senate outcomes shift to the right (favoring Republicans) over the past week. As the two charts that follow show, the market is assigning increased probabilities to bigger Republican gains.
As mentioned in a prior post, at this point in time it appears that Senate control will be determined by the outcome of three Senate races -- Illinois, Nevada, and Washington. Present data suggests that a Republican sweep of all three would hand them control. It is important to remember that we may see other states appear on the radar or one of the three fade from the picture, but as of today, if market trends persist, it will come down to those three.
One big change from last week is that if Republicans were to win all seats in which they now have over a 50% chance of winning they would stand at 50 seats. The remaining seat of the three would be Nevada which is as close to a coin toss as you can get. The midpoint of our pricing range for Nevada -- 48.7% chance of a Republican win. (The entire pricing range is 47.2% - 49.8%.)
I'm often asked how our projections compare with other projections, especially those by Nate Silver at FiveThirtyEight.com (now at the New York Times). Tomorrow's update will include a comparison of where ElectionMarkets.com's projections and probabilities compare with FiveThirtyEight's estimates on a race by race basis.
The table above reflects the Senate projections of the micro version of our model; the macro version projects 49.1 Senate seats for Republicans.
ALSO ... This weekend watch for a more detailed discussion of election scenarios and associated probabilites.
