Welcome back to the workweek, everybody. While Monday may not have been a great day for the market, it wasn't a terrible one either. The bulls following through on the strength they exhibited in the latter part of last week for a while this morning - no real surprises there. And, despite the last-minute lull, I think we have to assume the bigger bullish trend we see right now is going to remain in motion for a while. Though valuations are likely to keep a lid on stocks in the grand scheme of things, in the near-term, there doesn't seem to be a lot to get in the market's way. I actually want to talk more about that idea today - figuring out where the current rally might run out of gas - below when we slice and dice today's market action. Before we get to it though, I want to flesh out some of the details on an idea we've presented a few times to you, but haven't yet taken a close look at. What's that? We want to explore just how overvalued the healthcare sector is right now, and why we believe it could dole out some surprising pain over the course of 2015. Healthcare Overheated While we acknowledge 2014 was a pretty good year for the healthcare sector and an even better one for healthcare stocks (they were up 25% versus the broad market's 12% gain), we also have to say, much of the reason the healthcare sector's stocks did so well last year was the promise of the advent of Obamacare. With millions more new health insurance enrollees now willing and able to use their insurance, it looked like it was going to be a windfall for the sector. A funny things happened on the road to riches, however. Although the Affordable Care Act did drive a noticeable degree of new business and wider margins for healthcare companies, the benefit was much weaker than most of the market seems to have anticipated. Here's the really funny part about it - most investors don't seem to have noticed yet. I'm not just pulling a premise out of mid-air either. I went back and checked on the quarterly growth numbers the healthcare sector produced over the course of 2014, and none of them even came close to the results originally expected except for Q2. Take a look. Analysts - and therefore investors - kept looking for the income explosion, but never happened. The explosion was simply delayed.... shoved into 2015's outlook. If it didn't work out last year though, how can we realistically expect it to work so well this year? As for what this means in the grand scheme of things.... well, there are two problems at hand. The first one is, healthcare valuations are too high based on trailing results, as healthcare stocks raced well ahead of actual earnings growth. The S&P 500 Healthcare Sector is now priced at a trailing P/E of 23.0. At the same time, investors seem to be expecting these already-overpriced stocks to generate growth in 2015 that they were supposed to generate in 2014, but couldn't. The chart of the S&P 500 Healthcare Index tells the tale. Income is growing, but somehow the market (and analysts) expect income growth to radically improve in 2015. The Affordable Care Act could ignite that growth? Maybe it will help, but folks, the ACA has been in effect since the beginning of last year. 2014 should have been the big growth year for the sector, but it wasn't. It's not like we're going to get a wave of new enrollees in 2015, as most of the newcomers were in place by the beginning of 2014. I guess this is my long way of saying, while the growth forecast and forward-looking P/E of 18.3 looks attractive, it only matters if we can actually reach that lofty goal. I just don't see how we're going to get anywhere near the expected 27% earnings growth rate for this year. Just something to think about while we watch the healthcare sector rekindle its market-leading performance. Taking a Breather Yeah, the market stalled today. It's not a shocker how and where it happened though. The S&P 500's high of 2114.86 on Monday was basically in line with the late-February high near 2117.5. A lot of people have to be looking at that level as a potential ceiling, and as a spot to take some profits. We may have to burn through some supply here before we renew the uptrend. That's my indirect way of saying it's way too soon to sweat this. The market needed a break, and it took one. It may still be talking a break through tomorrow. As long as the S&P 500 remains above its 20-day moving average line at 2088.75, the bulls are still technically in charge. A pop above 2118 would obviously be bullish. Anyway, one of the things we've all been forced to think about of late - with the market at or near all-time highs - is, how do we know where rallies are apt to stop and reverse? For the better part of the past 15 years it's not been a major problem because there's always been some sort of historical peak to use as a guidepost. That is to say, prior high points seem to be key levels in the future, and when prior ceilings don't hold the market down, that often signals the beginning of a new leg of a rally. We don't have those pegs to use as floors or ceilings now though, as the Dow as well as the S&P 500 (and almost the NASDAQ) are in new-higher territory where the historical context just isn't there. There is a solution. Though I talk about the Elite Opportunity service from time to time, I don't get too deep into the EO's strategies. One of the reasons we don't delve into the EO's techniques is that they're not ours to give away. The bigger reason we don't wade too deep into Elite Opportunity's waters is, what John Monroe and his team are doing is higher level stuff we simply can't do justice in this free newsletter. I'll briefly make an exception today, however, because I want to show you one of the charts John inserted into today's Elite Opportunity newsletter. Take a look. All those horizontal lines? They're potential tops for the NASDAQ 100 Index. I know it might look like a bunch of random lines at first glance, but as someone who's been reading John's analysis for a long time, believe me when I say there's a method to the madness. John has this incredible knack for figuring out where reversals are most likely to materialize when there's no other context for a reversal being made. It's a skill that comes in pretty handy in times like the situation we're in right now, when investors are flying by the seat of their pants. Some of you may even know what those horizontal lines are and how John came up with 'em. Thing is, it may not even matter if you take the idea and apply them on your own. Not only do a lot of charting software packages not include them as a tool, even if they did, it's John's experience that really gets the most out of this type of technical analysis. I guess that's my long way of saying if you have a hard time determining when rallies and pullback have run their course and are due for a reversal, that's what the Elite Opportunity does for its members almost every day. If this is the kind of context missing from your trading arsenal, here's how you can start making sense out of a seemingly-senseless market. Or, just cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/