Hey traders,

The result that caught me off guard last night wasn’t the sweep. It was Greg Abbott.

I live in Texas. I knew Paxton was in trouble. I did not think one Senate race had enough drag on it to take the governor and the entire state leadership down with it. It did. And when a state that size changes hands in one night, the money moves before anyone’s finished counting.

So let me tell you what I’m watching now, because the next 61 days are a strange animal.

Democrats won both chambers.

Republicans keep the gavel until January 4th. That’s two months where the people writing the bills already know they’re leaving.

Start with the permitting bill. It’s up for a Senate vote on November 9th, and until yesterday it had real bipartisan support. Streamline oil and gas, streamline wind and solar, same track, same speed. The question I’d be asking if I were a Democrat who signed on: why hand the outgoing majority a win when you can wait eight weeks and negotiate from the chair? Anything that moves in this Senate before January moves on a party line, and the crypto bill that already died once isn’t coming back in a lame duck. The president has 60 days to wrap up the Iran situation and that’s about all the bandwidth there is.

Now the part I’d actually trade.

Medicaid insurers had the day they had for a reason. Broader coverage is the top priority on the winning side, and the December 11th funding deadline hands them leverage to push money that way. Near term, those names are the winners, and today’s move isn’t the end of it.

Private prisons are in for a rough stretch. Detention money just became a bargaining chip, and GEO and CoreCivic traded like it this morning.

Defense is where I want you patient. RTX, Lockheed, Northrop, L3Harris, all down 3% or more. ITA off 2.5%. That’s a knee-jerk, and knee-jerks take a day or two to normalize. The money for defense manufacturing and military bases doesn’t leave because the committee chairs changed; every one of those members wants that spending in their district. And the drone story is bigger than either party. Ukraine is showing everyone what the next war looks like. Iran showed it again. Kratos down 5% today reads to me like an opportunity getting cheaper, and my signal to step in is the same one I’ve used for twenty years: put selling and call buying coming back into the names. We’re starting to see that in Intel after AMD’s earnings. Defense gets its turn.

Solar is the same setup from the other side. TAN closed Tuesday at $43.34 and traded over $46 today. That’s a stock I’d love to own for a year. It’s also a stock I refuse to chase on election morning. There’ll be mean reversion over the next few days, and that’s where the entry is. Brookfield Renewable, BEPC, is the slower version of the same idea: hydro, wind, utility-scale solar, storage, and a stock that’s been beaten up on infrastructure costs and didn’t explode higher today. If this Congress starts green-lighting financing for green energy, and I think healthcare and green energy are priorities one and two, Brookfield gets paid.

One more thing on the president, because it matters for every one of these. A lot of people expect two years of vetoes. I’m not sure. Bill Clinton moved to the middle after ‘94 and got more done than anyone predicted. This president adjusts faster than most people give him credit for, and a Democratic majority that chooses policy over impeachment hearings may find a surprising partner. If that’s how it goes, the names above don’t get one pop each. They get several.

Which is my point. Every one of these is a sequence, not a single trade. The knee-jerk, the normalization, the proposal out of a committee, the headline rally, the fade. Several of the plays I talked through today don’t trigger for weeks, and they’ll trigger inside a window that’s behaved the same way for 40 years running: the index climbs after the midterm and the real money shows up underneath it, in the sectors the result just moved.

So I created Cycle 11 to let you take advantage of that pattern.

I’m sending the first trade Monday morning. The entry, the strike, the stop, the target.

If you want it in your inbox when it goes out, tap here before then.

Your only option,

Mark Sebastian