Shocked and in Awe, Energy and Defense Up, Palantir Participation?
I'm in awe of how the U.S. military performed in Venezuela, and how contractors like RTX are moving; Also, let's check breadth and chart the S&P.
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The Wall Street Journal and other news outlets reported on Monday evening that the Cuban government had revealed that 32 officers from that nation's Revolutionary Armed Forces and its Interior Ministry had been killed in the line of duty, as part of Venezuelan dictator Nicolas Maduro's security detail. Long considered among the elite in the intelligence and security field and heavily relied upon by the KGB during the Cold War, this is a major blow to not just the reputation of the group, but to Cuba's ability to market its agents to client nations.
What's incredible is that the U.S. Army's Delta Force not only took down these thirty-two officers as well as other Venezuelan members of Maduro's detail, but that the U.S. suffered no casualties and lost no equipment. According to the Journal, industry insiders estimate that roughly 140 Cuban agents had been assigned to Venezuela to protect Maduro. Beyond the 32 that were killed in the raid, dozens more are thought to have been wounded. How were U.S. forces this effective? I mean Delta is Delta, but this kind of dominant performance against what was considered to be a near-peer adversary at least on that level, is stunning.
We don't know much, and we won't ever know a lot. We do know that there was at least one agent inside Maduro's detail working for the U.S., but there has been plenty of speculation that perhaps U.S. forces made use of the Palantir Technologies (PLTR) "Gotham" platform. Though Palantir shares are currently trading at a dangerous place on the charts, which we covered here at TheStreet Pro, this platform was built specifically for use by defense, intelligence, and law enforcement agencies. There has obviously been no comment made by the company since the raid, but the stock, which had been trending lower, did rally for a gain of 3.7% for the Monday session.
Market Response
As far as U.S. energy stocks are concerned, we gave you the oil services and refiners over exploration in a separate piece here on Monday. Interestingly enough, Valero (VLO) soared 9.2%, while SLB (SLB) gained 9% and Halliburton (HAL) gained 7.8% as those specific names were the top three performers in the S&P 500 on Monday.
Defense stocks also had a very nice day. Drone makers ran wild with AeroVironment (AVAV) and Kratos Defense (KTOS) up 16.1% and 13.4% respectively. Tiny Ondas Holdings (ONDS) , which is a big "Stocks Under $10" name, was up 13.7% and is already up a jaw-dropping 26% year to date. Yes, after just two trading sessions. We rule.
The chart of a more traditional defense contractor that made only small gains on Monday, but is also a Sarge holding, caught my eye as the session closed. Check this out:
Remember this "basing period of consolidation" on the RTX (RTX) chart? RTX is the old Raytheon for those who watch cartoons and videos of 13-year-olds falling off of skateboards during trading hours. We showed readers this pattern with this pivot ($181) about two weeks ago. The attempted breakout in late December, support shown at that pivot on Friday and subsequent rally on Monday are exactly what I am referring to when I call something a "take and hold." This chart appears to be working to perfection at least for now. I am reiterating my $217 target price.
Rock! Rock! (Till You Drop)
Hold on to your hat, hold on to your heart
Ready, get set to tear this place apart
Don't need a ticket, only place in town
That'll take you up to heaven and never bring you down
- Lange, Clark, Allen, Savage, Elliott, Willis (Def Leppard), 1983
'Glorious' Monday
Financial market essentially decided that there was no imminent risk associated with the raid into Venezuela over the weekend and poured into "risk-on" assets on Monday. While the Nasdaq Composite and S&P 500 posted respectable gains of 0.69% and 0.64% respectively, several mid-major equity indices really ramped higher.
The KBW Banks popped for a gain of 2.4%, as the Russell 2000 ran 1.58%. After that, the Dow Transports, Dow Industrials, S&P SmallCap 600, S&P Midcap 400, and Philadelphia Semiconductors all sported gains of at least 1%.
From the "nobody cares" department, Santa failed to show his face for a third consecutive year, and the Dow Jones Industrials closed at a record high. From the" somebody does care" department, gold, silver and bitcoin all soared.
Minty Fresh!
How was the breadth? Say it with me... "Minty Fresh." So nice. Check this out: Seven of the 11 S&P sector SPDR ETFs closed in the green. Performance could not have been more segregated. The five cyclical sector funds took the top five spots on the performance tables, which is considered a positive for economic growth. All five gained at least 1% on the day with both Energy (XLE) and the Financials (XLF) gaining more than 2%.
The five cyclicals were followed by the two "growth" sectors that both also sported gains. Then lastly, all four defensive sectors closed in the red, at the bottom of the tables, with utilities (XLU) taking a drubbing. Again, performance like this, if sustainable, is an economic positive.
Winners beat losers by about nine to four at the NYSE and by about five to two at the Nasdaq. Advancing volume took a commanding 70.9% share of composite Nasdaq-listed trade and a 66.9% share of composite NYSE-listed trade. As for aggregate trade, on a day-over- day basis, activity increased by 38.4% and 19.2% respectively across NYSE and Nasdaq listings. Even more exciting, aggregate trade across the membership of the S&P 500 crossed above the 50-day trading volume simple moving average for the first time on a non-expiration related event since Dec. 10 and only the second time since Nov. 24.
However...
This is not necessarily a bad thing. Though Friday was a "day one" bullish reversal of trend for the S&P 500, Tuesday, despite its increased volume and semi-euphoric trading activity, does not count as a day of confirmation.
Because there was no pause in between where investors appear to think about what they are doing, Monday's rally is nothing more than a continuation of Friday's move.
On the bright side, though better than neutral, large cap equities in the U.S. are nowhere near being considered technically overbought. In addition, for the S&P 500, within the daily moving average convergence divergence, the histogram of the nine-day exponential moving average appears close to going positive while the 12-day EMA is just a smidgen away from crossing above the 26-day EMA. If we see both of those positive moves at the same time, the algorithms that control price discovery will add to that Monday rally quicker than you or I could react using just our fingers and our keyboards.
Semiconductor-Palooza
Nvidia (NVDA) , Advanced Micro Devices (AMD) and Intel (INTC) all presented last night from Las Vegas at CES 2026. All three have products in production and products in the pipeline that will apparently knock our collective socks off. I'll let the actual tech geeks explain that new stuff. I'm strictly a cash flows, balance sheets, income statements, technical analysis, monetary policy, fiscal policy and baseball guy. All three are trading slightly higher overnight.
Economics
(All Times Eastern)
08:55 - Redbook (Weekly): Last 7.6% y/y.
09:45 - S&P Global Services PMI (Dec-F): Flashed 52.9.
4:30 p.m. - API Oil Inventories (Weekly): Last +1.7M.
The Fed
(All Times Eastern)
08:00 - Speaker: Richmond Fed Pres. Tom Barkin.
Today's Earnings Highlights
(Consensus EPS Expectations)
After the Close: AIR (1.04)
At the time of publication, Guilfoyle was long PLTR, SLB, HAL, ONDS, RTX, NVDA, INTC, AMD equity. Long physical gold and silver.
