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In November, the Financial Select Spyder (XLF) finally moved through five-month resistance and it appeared that the financial sector was going to join the stock market rally. It turned out to be a false breakout as XLF quickly retreated to support. Now XLF is back above the breakout level, and if the financials have finally turned, the major averages can go much higher. The chart of the S&P Midcap Investment Banking & Brokerage group looks strong with its pattern of higher highs and higher lows. This is the time of the year when the mid caps start to outperform, so they should be favored over large-cap stocks.

Tom Aspray, professional trader and analyst, serves as video content editor for MoneyShow.com. The views expressed here are his own.