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Pisani: Traders Take Health Care Cues from Intrade

The S&P 500 took another pop up late afternoon Tuesday to the highs for the day—and just shy of highs for the year.

Traders are citing Intrade, which allows investors (gamblers) to bet on the direction of anything, now giving 84.9 percent odds that Massachusetts Republican State Senator Scott Brown will defeat Democrat Martha Coakley.

It's a broad rally, even outside the influence on health care stocks. This election is being portrayed as a referendum on health care reform, and, to some extent, on President Obama's popularity.

A Republican victory in Massachusets, or even a respectable loss for the Republican candidate, would increase the chances that health care reform will not pass...but it's more than that.

It increases the chances of a general legislative gridlock—and that means the Congress is less likely to raise taxes, less likely to see more legislation that would harm business, etc.

"Some money being put to work in equities to some degree due to the potential unlocking of the supermajority," one trader wrote to me.

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