The cheerleaders of the stock market are trying to get us to believe that the Market Cycle and Economic Cycle theory of sector rotation no longer exists. At least, this is my take.

Sector Rotation is the movement of money into various industry sectors as the stages of an economic cycle unfold. There is a normal and distinct pattern that the economy and stock market follows during periods of economic expansion and contraction.

For some reason, we are being lead to believe that the economy is going to sidestep the contraction phase, and go right back into expansion. I'll believe it when I see it.

Even the fed is saying that there is no evidence (other than a downturn in real estate) that we have experienced an economic slowdown. To believe we are just going to skip this phase of the economic cycle is at best naive.