Welcome back from the weekend, everyone. Yeah, it wasn't the greatest start to the new trading week today... a real disappointment considering just how strong the market was on Friday. On the other hand, we can't say we're entirely surprised the rally effort fizzled when and where it did. Stocks have been choppy and have lacked any real follow-though all year long, so why should now be any different? I've got a theory on the matter too. Before we get to my theory though, let's talk real quickly about today's action, and zero in on a chart of the S&P 500 since we talked about the NASDAQ Composite at length on Friday. As they say, read 'em and weep. Any of the bullishness still lingering from the October rally has been officially squandered. It matters, because the market's best bet at a break above the upper Bollinger band is the first effort. The S&P 500 failed to clear that hurdle late October, has since been unable to even try again. The key issue with that is, each failed effort to break out makes it tougher to break out on the next attempt. Eventually, traders just give up altogether (which is, ironically enough, the time to finally expect a big move... but that's another story). The end result in the meantime is a market that gets comfortable between its Bollinger bands, and gets comfortable hugging its long-term and short-term moving average lines. There's an upside to this stagnation, mind you. That is, being trapped between Bollinger bands means the market doesn't go down either. That's not a particularly thrilling prospect either though. We're going to have to be patient waiting for stocks to get going in earnest again. As for my theory regarding this stagnation, I've got a feeling the market is so anticipating a Santa Claus rally, they're keeping their powder dry now so they can actually make it happen later this month. There's a lot of psychology packed into the premise. A Santa Claus rally is a self-fulfilling prophecy, for one, and even without knowing, traders subconsciously know there's not enough valuation room for bullishness now AND later. So, they're waiting until later to make sure it happens. I'm guessing they'll use the impending rate hike as the catalyst. And to show you I'm not just blowing smoke about the Santa Claus rally starting in the second half of the month, our chart below shows the average day-by-day average performance of the S&P 500 over the past 30 years. The first couple of weeks of December are usually weak ones, with things perking up - on average - right at the 15th. [Our chart also shows how badly the S&P 500 has lagged its average day- by-day performance so far this year.] In any case, without any clarity as to when or if the market is going to break out of this overall funk, it occurred to me it's been a while since we took a look at my favorite tool for overcoming the market blahs... a bird's eye view of each sector's relative performance, on the hunt for which sectors are heating up and which sectors are cooling off. If you can catch a budding sector trend while it's still young, you may just be able to squeeze a little more performance out of the market than just being stuck with the market's average results. The chart below looks a little bit different than the charts we had been using, but the data is the same - it's a visual performance comparison of all ten major sectors through Friday for the past six months (and if you're color blind, well, the labels and raw data at the top of the chart should help a little). A handful of things really stick out to me when I survey the landscape from this distance. In no certain order... Consumer discretionary stocks have emerged as a leader, validating a theory we've posed a few times over the past several months. It doesn't seem anyone's really noticed the fact that these stocks as a whole are doing as well as they've been. Technology stocks have quietly pulled themselves out of mediocrity, and are gunning to take a late lead in this year's performance race. While materials stocks have been a little tepid for the past few months, I find it interesting how they haven't been getting killed like energy stocks have since late October. Perhaps they've finally disconnected with oil. Either way, I think materials stocks are watch-worthy just because they have the most recovery potential. I've actually got some other thoughts on this chart, but they'll have to wait. The proverbial "next step" is drilling even further down into each sector and finding the industry or stock leading each sector's charge. It's admittedly a big job, and not easy. It's worth it though. If it's just not your thing - or if you simply don't have time - to do that kind of ferreting, I strongly recommend you become a member of the Elite Opportunity service today. Even though he doesn't explicitly talk about it much, John Monroe and his team use this kind of bigger-picture perspective all the time to help guide their detailed decision-making. It wasn't one of the tools he used today, when he laid out earnings growth expectations by sector all the way through late 2016. But, don't think for a minute the technical landscape and the fundamental landscape don't have anything to do with one another. As John said it so accurately today, "...while technicals always tend to rule the short-term landscape, it's the fundamentals that will always win in the end. " The opportunity for you as a trader lies in the points where the technicals are gravely mismatched with the underlying fundamentals. John's got a real eye for those situations, which is why the Elite Opportunity portfolio is doing so well this year. But don't take my word for it -- find out for yourself. Sign up for the EO service today and watch the guy do some brilliant, money-making work. Here's how, or just cut and paste this link: https://www.smallcapnetwork.com/pages/SCNEO/v1/ By the way, Tuesday's newsletter will be coming out at the market's open rather than after the close. We've got something special for you. Keep your eyes peeled.