Forget everything you know -- the stock market certainly has.

It's almost crazy to think that on Wednesday, the stock market was celebrating after a Democratic sweep of the midterm elections. But all the good vibes were forgotten Thursday, with the Dow Jones Industrial Average down 1,605.11 points, or 3%, the S&P 500 off 3.9%, and the Nasdaq Composite clobbered to the tune of a 5% drop.

In other words, it's bleak out there. So bleak, in fact that it's hard to find much that is working.

None of the State Street Select Sector SPDR exchange-traded funds were higher on Thursday -- not the Consumer Staples, Energy, Utilities, or Health Care ETFs -- while the Technology fund was down more than 7%.

Stocks with exposure to AI were getting clobbered: Bloom Energy, which is supposed to power data centers, dropped more than 16%, while Sandisk, Western Digital, Vertiv, Advanced Micro Devices, and Micron were among the S&P 500's 10 biggest losers.

The selling might seem extreme, but not when you consider how Wall Street works. Everyone has a financial model that projects growth in the years to come, which is ultimately used to derive a price target.

With the Democrat sweep, however, all those growth targets have to be tossed in the rubbish bin. Investors now have to consider how quickly data centers can actually be built, and what that will mean for the companies selling products into the ecosystem.

Good luck trying to find an accurate number. It's anyone's guess right now, and with many of these stocks having traded up ridiculous amounts on what now look to be ridiculous assumptions, something had to give.

The question is how much.

BTIG's Jonathan Krinsky isn't optimistic. He notes that on Wednesday, 22% of S&P 500 stocks closed with a "Relative Strength Indicator," or RSI, above 70, a level that would indicate that they are overbought.

The RSI of the S&P 500 itself, however, was just 50.4, the second-lowest ever when that many stocks were overbought, only outdone by an occurrence in April 1999. That's a reflection of the violent rotation that happened inside the market, but Krinsky worries that if the oversold stocks -- namely chips -- can't bounce, and the overbought shares get sold, the stock market could be in for a whole lot more pain.

"That is the condition for the correlation-one selloff, when oversold can't bounce and overbought begins to correct," he writes.

The big fear is that we are witnessing the popping of the AI bubble -- and given the extent of the selloff, it's a real worry.

In a note written before the election, however, 22V's Jordi Visser argued that it's hard to call it a bubble when everyone is worried that it's a bubble. A bubble, he says, needs conviction, and rather than conviction, investors are constantly worried -- and they want to be paid for the uncertainty.

"For many, the natural explanation for this volatility is that we are witnessing another speculative bubble," Visser writes. "What if that long awaited bubble never forms, and the uncertainty never fully resolves because the innovation creating it never stops accelerating?"

That's a big "what if," and I'd rather lean into a less difficult one. Since 1950, the S&P 500 has always been up six months and 12 months following a midterm election -- always, as in 100% of the time. That's a sample size of 19 elections, not huge, but not tiny either. It's a reason to think that the markets will work their way through the volatility, rather than be engulfed by it.

But even that silver lining has a touch of gray. The only time the stock market has moved 1% in either direction on the day after the election, only to move twice as much in the opposite direction the next day, was in 2022, when the S&P 500 fell 2.1% the day after the midterms, and then rose 5.5% the following day.

That happened just after the bear market low on Oct. 12, 2022. Now we're experiencing almost the reverse -- a downward reversal following a record high on Oct. 6.

Maybe it really is time to forget what we know.