Tuesday, November 6, 2012

Election Day!  Tomorrow we can go back to enjoying commercials for beer, cars and Sandals resorts.  Or maybe not, the early result out of Dixville Notch NH is a tie, 5 votes for each candidate, let’s hope we know the winner before we mine tomorrow’s data.  Both camps express confidence in their victory and we won’t say whose posters adorn the walls of the data mine.  However, we have highlighted two funds over recent weeks as proxies for each candidate.  Mitt Romney is barnstorming through coal country and the Market Vectors Coal Fund (KOL) finds itself in 24th place today, down 4 positions from Friday’s close but near the highs it reached after the Republican expressed his fondness for coal in the first debate.  The polls have tightened since Hurricane Sandy hit but this fund has risen in Quant’s ranking since its 32nd place on the Friday before the storm. It has a very strong 8.9 Reward Rating but that comes with a higher than average 6.63 Risk Rating. Regardless of the election results, President Obama will forever be associated with health care and the fund we have used as his proxy, the SPDR Health Care Select Sector Fund (XLV), finds itself in 55th place today, up 79 places since Friday’s closing results.  Getting his arms around NJ Gov. Chris Christie has apparently helped but that fund ranked at 24th place before the storm. It's Reward Rating is close on the heels of KOL at 8.54 but carries a much lower Risk Rating of only 1.44 red diamonds.  Quant doesn't do politics and these rankings reflect not only the way the market is behaving but also the historical fundamental underpinnings of each fund.  One reason for KOL’s higher rank is its better fundamental metrics compared to where they have been historically.  When looking at only the behavioral side of Quant, XLV has the better momentum.  We can’t say for sure who Quant thinks will win but we can ask you all to go out and vote today with hope that the results from Dixville Notch will not be reflective of the electorate at large.

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