Here is another one of our favorite charts, courtesy of Jim Stack and Investech Research ^[1]. It shows how leadership shifts over three stages of a Bull run:>

Stages of Sector Rotation

• Stage I:   The transition from bear market to bull. Cyclical sectors — Financials, Technology and Consumer Discretionary — outperform.

• Stage II:  Mid-to-late bull market.  Materials and Industrials outperform, as do  Energy and Telecom stocks;

• Stage III:  Nondiscretionary sectors — Health Care, Consumer Staples and Utilities — Recession proof products and services — are the most resilient as the bull begins to die.

>

Three Stages of Sector Rotation

^[2]
Chart courtesy of Investech Research ^[1]