Much of the U.S. political uncertainty is over and, yes, many stocks soared on the news. But it was still an odd day, as many stocks were smacked. At the end of the day, a new administration can't be good for all industries. On Wednesday, the S&P 500 tacked on 2.5%, the S&P 100 rose 2.6%, the Nasdaq jumped almost 3%, and the Nasdaq 100 popped 2.7%. All four indices gapped to all-time highs; in most cases, that is bullish as there is no overhead supply with which to contend. Only the "last" all-time high in each cycle is bad. But the real action on Wednesday was in the smaller stocks, with the S&P MidCap 400 (MDY) spiking a bit over 4% and the S&P SmallCap 600 (SML) and the Russell 2000 (IWM) both surging about 6%. Those are all-time highs for the MDY and SML, while the IWM is getting close. NYSE breadth was only +800, which stinks compared to the index returns. The NYSE advances/total issues and up volume/total volume were low- to mid-60%, also poor. Financial stocks soared over 6%, with big banks and investment services going ballistic (JPM +11.5%, BAC +8.4%, WFC +13%, MS +11.6%, GS +13%). Those are the largest one-day gains for these stocks since the end of the pandemic and, before that, since the end of the financial crisis. Industrials and Energy were next, up almost 4%; Discretionary and Technology rose about 4%; and Communication Services. added 2.5%; Real Estate fell 2.7%; Consumer Staples dropped 1.6%, and Utilities fell 1% as rates rose again. (Mark Arbeter, CMT)

The United States economy is full of innovation. It has to be. Manufacturing industries that dominated the economy decades ago - textiles, televisions, even automobiles to a large degree - have moved overseas, where labor and materials costs are lower. Yet the U.S. economy, even during the pandemic and the current period of high inflation, has expanded to record levels. If U.S. corporations weren't innovating, creating new products (such as vaccines and AI) and services (such as Zoom calls) and moving into new markets, the domestic economy would not be growing, and capital would not be flooding into the country. The current high level of the U.S. dollar relative to currencies around the world attests to the confidence that global investors have in the durable and innovative U.S. economy.

Crude oil (WTI) closed on Monday around $74/barrel in what has already been a wild ride of late. But that ride re-accelerated after hours as OPEC cut its demand outlook and fears lessened about energy facilities being targeted as part of Middle East hostilities. After falling to an October 1 intraday low of $66.33, oil had surged to an October 8 intraday high of $78.46. But WTI dropped to an intraday low $71.53 the next day, and then rebounded to $76.24 by October 10. With that rally, WTI had broken some shorter-term bearish trendlines and completed a bullish false breakdown. But as evidenced by events over night, the worry for any intermediate-term bullish call on oil is the lack of positive demand and supply news. And while it's hard to believe things will quiet down in the Middle East in the near term, crude could move even lower when hostilities do calm. As we've said, the COT data for WTI is technically bullish. But mid-October to early December has been the worst time for oil over 40 years. The SPDR Gold Shares (GLD) ETF has moved sideways since September 26 and appears to be tracing out a bull flag. The reversal in the dollar and interest rates that started in mid-September has not hurt gold and silver so far; once again, the metals are ignoring a rising currency. As we have been saying, the COT data on the dollar is bullish while the COT data on the metals is terrible (but has been so for many months). When markets don't behave as they have historically, we can surmise that something is different. The iShares Silver Trust (SLV) looks like it might be tracing out a bullish cup-with-handle formation and a bullish continuous inverse head-and-shoulders pattern. A break over $30 would complete these. (Mark Arbeter, CMT)

Nvidia is a leading developer of graphics processing units. Traditionally, GPUs were used to enhance the experience on computing platforms, most notably in gaming applications on PCs. GPU use cases have since emerged as important semiconductors used in artificial intelligence. Nvidia not only offers AI GPUs, but also a software platform, Cuda, used for AI model development and training. Nvidia is also expanding its data center networking solutions, helping to tie GPUs together to handle complex workloads.