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We saw new all-time highs across the board last week, which is, on its own, a bullish sign. After all, let’s not forget that new all-time highs only happen in bull markets.

But we can’t lose sight of the fact that stocks have been straight up for over four months now. The last thing we can afford is to become complacent after this epic rally.

Bulls have had it good lately, but as I’m about to show you, there could be some complacency creeping into the tape. Here’s what I mean…

A Reshuffling of the Sector Deck
 

The worst-performing sector of the year, healthcare (XLV), has just come alive. There are a couple of ways to dissect this, so hear me out.

The bullish interpretation is that sector rotation is the lifeblood of bull markets. Healthcare has pretty much done nothing this year, and it’s the second-biggest sector of the S&P 500. After tech, no other sector is more important in order to keep this bull market alive.

But the bearish interpretation is that this is a defensively-oriented sector. The surge last week was so strong that it actually moved healthcare into the top-performing sector over the past month.

So, given that stocks have rallied for over four months now, I’m inclined to believe that this is a signal from the market that we need to tread carefully in the near-term.

I’m still very much in the camp that we need to buy the dip, and I’ll be sure to be discussing the big opportunities within the healthcare space - it goes a lot deeper than you think.

You’ll want to stay tuned to this.

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