Even if we assume my predictions are very accurate, I'm not familiar enough with Intrade to know whether it's mostly guided by fundamentals vs technical analysis.

That is, Obama's value may go up because many people think it will go up, due to some technical indicators, and not necessarily because Obama's probability of winning went up.

This doesn't make sense to me.

Indeed, the more irrational you believe Intrade's users to be, the more incentive you have to use it. Same for the stock market, or any other market.

Does this always work? If you think that company X should be valued at $10 billion, but is currently valued at $5 billion because the market is being irrational, are you claiming that it's always a safe bet to invest in this company? Are you claiming that in the long term the market becomes rational and will surely value the company at the value you think it is worth?

You're missing your parent commenter's point. He/she means to say if more people are wrong then the odds are stacked higher against the candidate you expect to win therefore the payout in favor of your candidate would be higher. Sorry I think my comment is even more confusing but I hope you arrive at this conclusion anyway.