Closing SA — 2026-11-04

Situation Awareness: Cautious. Wednesday brought a broad relief rally after Democrats won both chambers of Congress and President Trump accepted the result, and the Dow gained 3.03%. SPY rose 1.63% to $766.65 and held well above its SMA200 ($729.91), but it closed just under its SMA50 ($767.05) and SMA20 ($767.57), and the semiconductors fell 3.1%. Trade mode for tomorrow: selective, favoring consumer, housing and health care leaders while avoiding AI infrastructure until it stabilizes. Today’s defining context was the election result as a clearing event, crude oil falling 8.3% to $88.23, and Treasury yields at eight-week lows, which together rotated leadership hard away from AI infrastructure and toward consumer-facing names. Regime context — 58.01% of stocks closed above their 40-day SMA (vs 50.7% prior day, regime held at Cautious), and the 4% Bull/Bear gauge shows 730 bulls vs. 435 bears. The recent 3-day trend has been choppy and rotational: a tech-led selloff Monday, a narrow tech rebound Tuesday, and a broad, tech-lagging thrust Wednesday that has not yet produced a sustained trend.

SIP: PENG CCXI POM

• Momentum and continuation setups fired: 2LYNCH: 21, Darvas Box: 21, 9M Catalyst: 13, D9M: 12, Reversal Bullish: 5.
• Leading sectors: Utilities +7.33% (skewed by CREG +677%), Real Estate +3.47%, Consumer Cyclical +1.68%. Leading themes: Medical Software +36% (RBOT outlier), Alternative Energy +12.24% (CREG outlier), Internet Retail +9.29% (CPNG +10.58%).
• Key event: the midterm result and Trump’s comment that he has no immediate plans to strike Iran sent WTI down $7.93 to $88.23, more than 15% lower week-to-date. The VIX fell 19.4% to 16.78.
• Regime threading: the morning SA called Cautious (50.7%) and the close is Cautious (58.0%). The regime held because breadth improved 7.3pp but remains well short of the 65% Bullish threshold, and SPY and QQQ are still below their SMA20 and SMA50.
• DEP watchlist: CVNA, TOST, BX, LUV, MOS
• SIPS: CVNA, THC, CDW

Market Breadth — 2026-11-04

Sentiment 4%	Very Bullish	40SMA	Bullish
Bull 4%	730	Bear 4%	435
% > 20 SMA	93%	% > 40 SMA	58.01%
Bull 9M	65	Bear 9M	66