Tech stocks are finishing the year strong and have benefited from the relative lack of interest lately in cyclicals. The small-cap rally seems impervious to any potentially negative news or conditions lately, but it’s probably time to prepare for this run to end. With debt levels rising rapidly, there’s a strong case that volatility could rise significantly leading to significant swings between Treasury and equity leadership.

With tech and consumer discretionary rebounding, this could be an indication that investors are starting to move back into previous winners. Healthcare has been showing a little life lately. The lumber/gold ratio finally takes a pause and could be giving some indications that the latest rally is losing steam.

Investors have slowly pivoted away from long-term economic growth optimism and focused a bit more on short-term challenges. Last week’s underperformance from cyclicals based on weak jobs data makes these sectors worth watching. The strength in the current small-cap rally is formidable.