Historically, the stock market rallies, following a presidential election, until the inauguration in January, when the dismal political reality arrives. If Clinton had won the election, I suspect that rally would have been minor, as the market already expected her to win and had priced that into market prices. If Trump won, I predicted the market would experience a sharp dip and a quick recovery. In fact, it was sharper and quicker than I predicted but still directionally correct.

This rally is stronger than normal. The reason is that gridlock lost! This Trump rally would have been much weaker if Democrats had held onto the Senate. If Democrats had swept the White House, Senate, and House of Representatives, we would also have seen a strong rally. However, the new CNBC survey shows Republican voters care more about economic issues than Democratic voters. That is the reason that the end of gridlock by Republicans produces a stronger stock market rally than the end of gridlock by Democrats. Investor confidence has jumped 17 points since the election.

I don’t know if this rally will be longer than normal. But, I can guarantee the rally will run out of steam in the near-future, because Trump cannot count on the House Republicans. If he can “triangulate” like Bill Clinton, creating a coalition of moderate Democrats and moderate Republicans, Trump can actually accomplish something. That will revive the by-then-dormant “Trump Rally!”

For now, the market is reflecting rising expectations, but there is no difference between realistic rising expectations and unrealistic rising expectation. We are now expecting too much too soon.

So, don’t get too excited when this frenetic rally corrects, because that is normal. Just enjoy the ride!