We’re in an “already, but not yet market”.
Meaning, we’re “already” past the elections, “but not yet” sure how the market feels.
Although we’re getting an idea…
After Wednesday’s short-lived rally, tech stocks took a turn for the worse. And major indexes followed them lower.
For example, the Invesco QQQ Trust ETF (NYSE: QQQ) fell to support from earlier this year on July 29:
We theorized a tech selloff if democrats won the midterm election. This isn’t a surprise.
But that’s not the only trend we’re seeing…
A few sectors are stepping in to fill the bullish vacuum. Those are the sectors I’m most interested in.
The Tech Selloff
Wednesday’s rally didn’t last 24 hours.
Democrats swept both chambers of Congress on Tuesday. Now investors are worried the AI buildout could hit a political wall.
The biggest shock came from Texas. Democrat Gina Hinojosa, who wants to enact an immediate moratorium on data centers in the state, won over incumbent Republican Gov. Greg Abbott.
According to Wells Fargo, 27% of planned data-center gigawatts will come from the Lone Star State.
Goldman Sachs analysts expect Democratic governors in Texas, Georgia and Michigan to impose conditional moratoria. By Goldman’s estimate, the states likely to add restrictions account for 45% of planned U.S. data center capacity.
And politics isn’t the only problem.
AI stocks have been swinging for months on worries that expensive borrowing could slow the data center buildout.
Qualcomm slid 9% after it missed Wall Street estimates for fourth-quarter smartphone chip sales, posted November 4 after the close. That post-election catalyst led the chip-stock wipeout.
As of Thursday, November 5:
- AMD was down 15.8%, Micron 15.5%, Broadcom 9.5%, and the PHLX Semiconductor Index 10.8%.
- Nvidia was down 8.9%, and it’s now nearly 25% below its Oct. 6 record close. That leaves the stock below its December 31 close, so it has given back all of its 2026 gains.
The Nasdaq and S&P 500 were on track for their biggest one-day drop since the April 2025 “Liberation Day” selloff.
But not everything is red.
My Watchlist
Thursday was one for the books.
The QQQ dropped 3 ATR in a single day. ATR, or average true range, measures how far a stock typically moves in a session. So we packed about three days of movement into one.
Now the QQQ is sitting at -4 ATR, close to its 200-day simple moving average… and near the bottom of a volume support zone around $732 per share. That’s a lot of potential support stacked in one spot.
But support only matters if buyers show up.
That’s why I keep coming back to the “already, but not yet” idea.
We’re past the elections, but the market hasn’t decided how it feels about the results.
Here’s what we do know… The market rolled over, and the VIX is in a daily uptrend.
When fear rises, money tends to rotate into safer corners of the market. So here’s what I’m watching:
- iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT): Bond prices rise when yields fall. The 10-year Treasury yield eased to 4.86% Thursday morning, down from 4.90% late Wednesday.
- SPDR Gold Shares (NYSE Arca: GLD): The classic safe haven.
- Utilities Select Sector SPDR Fund (NYSE Arca: XLU): Steady demand regardless of the economy.
- Health Care Select Sector SPDR Fund (NYSE Arca: XLV): People need medicine in any market.
- Consumer Staples Select Sector SPDR Fund (NYSE Arca: XLP): Groceries and toothpaste don’t go out of style.
I’m also watching the relative outperformers.
These are stocks holding up while the indexes fall. If a stock can stay green on a day like Thursday, it’s showing real strength.
The market is trying to figure out where it’s going next.
Pay attention and make sure you’re along for the ride.
Be good (and be good to others),
Ben Sturgill
*Past performance does not indicate future results. Not typical.
