October marked a new flavor of the dispersion trade.

Staples had their best month since 1998 and the iShares Semiconductor ETF (NASDAQ: SOXX) had its longest daily losing streak since 2006. On the second trading day of November as the market anxiously anticipates midterm election results, there are cracks forming in the sell chips buy staples regime.

SOXX is up over 2% at time of writing while State Street Consumer Staples (ARCA: XLP) languishes down over 1.8%. Nvidia Corp (NASDAQ: NVDA) is trading up over 2% after a peek below the 200-day moving average and the raging dumpster fire in Intel Corp (NASDAQ: INTC) following their pathetic guidance on last week’s earning slowed to a smolder.

So what’s changed? Apple Inc’s (NASDAQ: AAPL) pullback on earnings last night freed up some much-needed cash to move into tech just as Invesco QQQ (NASDAQ: QQQ) tagged the 10% correction from all time high. The democratic sweep and fear of subsequent AI regulation has rapidly become a crowded trade and there is now a real possibility that the market sold the rumor and will potentially be buying the news as volatility drops and hedges rapidly lose value.

In this scenario the market could violently rotate back into discounted risk while taking profit on the now eye watering valuations in the XLP into year end.

Sam Hensel-Hunter, Contributor, Stock Trader Network