Sector rotation is the lifeblood of a bull market.

We're seeing Small Cap Financials $PSCF begin to weaken to red while the other financial ETFs are still green.

It's positive to see that despite this recent weakness in financials, the Large Cap ETF $XLF has failed to hold its breakdown and is back above support.

This is a key theme right now, where breakdowns are failing. Of course, this is positive information for bulls.

If we're in the context of a bull market, it wouldn't be surprising to see all these rotations under the surface.

An area that needs to be discussed are commodities. We're in a super cycle and there's plenty of areas to profit. JC and Jason Perz discussed exactly this in a brief video, it's got a bunch of great insights.

You can watch it by clicking here....

Large Cap Growth is still the predominate theme of leadership right now. No changes here.

The most notable shift has been the S&P 500 $SPY breaking below this key level of support. SPY must reclaim 585 to repair the recent damages.

It's certainly hasn't been a great start to the month, which carries a wide set of implications for the rest of the year.

JC just shared his brief chat with Jeff Hirsch explaining what this price action means, it's a fantastic video. You can watch that here.

Here's how things stand on the global equity stage right now.

A development that is front and center is the increasing number of countries breaking down. Pictured below is the Vanguard FTSE Europe ETF $VGK which has just failed after retesting this broken support.

The trend is definitively down in Europe. This demands attention.

The next few weeks are the most critical time of year for investors in retail and consumer stocks, as companies report their results from the 2024 holiday season and set expectations for 2025.

Find out which retail stocks are best positioned right now in this free report from long-time retail analyst Jeff Macke. 

Get the report here. 

Last week we discussed how Retail $XRT is transitioning from red to green and this bullish development is still intact.
 

With the Retail ETF $XRT retesting this level of support, it would be a logical place for buyers to step back in.

The next few weeks are the most critical time of year for investors in retail and consumer stocks, as companies report their results from the 2024 holiday season and set expectations for 2025.

Find out which retail stocks are best positioned right now in this free report from long-time retail analyst Jeff Macke. 

Get the report here. 

There's no notable changes across our thematic universe, except for emerging/China technology, which has transitioned to red.

This is pictured below.
 

The China Technology ETF $CQQQ has broken below a key level of support.

We want to see this theme transition back to green and for this support to get reclaimed before getting overly bullish.

Take a look at Large Cap Technology $XLK—it’s made a bold move, flipping from red to green as it chews through that overhead supply at former resistance.
 

The tape’s telling us the breakout might take its sweet time, but when it happens, expect tech to light up in full-on green mode.

The big standout here is how growth is persistently green while value has been red.

Until this changes, it's difficult to be overweight value relative to growth.

Tracking the ratio between the Large Cap Growth ETF $IWF and Large Cap Value $IWD, it has just broken to new all time highs. This suggests growth could be setting up for further outperformance. 

We've been talking about the relentless strength out of Argentina $ARGT for months now. But an underdog on the global ETF stage right now is the United Arab Emirates $UAE.

On our Power Rankings score, it's actually stronger than the S&P 500 right now.

The big story here is energy. If crude oil begins working higher, as it's done over the last month, this is a significant tailwind for this ETF.

Closing out the year, tech stocks are stealing the spotlight. Despite showing a bit of weakness this December, the big picture is clear: the bullish trends are undeniable.

Meanwhile, many parts of the market are settling into trading ranges, while others are dipping back to test key support zones.

Take Retail ($XRT), for example. It’s gone from red to green over the past month, making an impressive transition.

What’s particularly intriguing is the chart—it’s revisiting a major breakout level.

This is a natural spot for the group to gather momentum and start climbing higher.

Heading into 2025, a key theme that stands out is speculative growth.

The Ark Innovation ETF $ARKK has completed a full transition from red to dark green, indicative of strong relative strength.

In the below chart, we've stretched the x-axis to bring awareness to the scope of price discovery that could unfold in 2025.

It’s easy to focus on the leaders, but let’s shift our attention to the bottom of the rankings — energy.

This sector has been consistently lagging, showing red for some time. That’s the beauty of these Power Rankings; they give us an early warning when trends start to shift.

Energy hasn’t turned the corner just yet.

Meanwhile, Crude Oil is sitting at a critical support level and remains tightly coiled.

If we see an upward breakout in Crude, it wouldn’t be surprising to watch Energy transition from red to green.

Large-cap and growth stocks continue to outperform, while small-cap and value stocks lag behind.

One key development we're watching closely is whether the recent softness in U.S. indices, particularly the S&P 500, marks the formation of a potential lower high.

Should the S&P break to a new low, it would confirm a shift in the short-term trend to the downside.

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