I have begun seeing a rotation out of some of the outperforming sectors and into some of the weaker sectors during the first part of August. Here is a quick snapshot of the month-to-date returns of the following sectors. It is clear that there is money flowing out of some of the higher-yielding stocks and into some riskier assets.

Below, I have listed the year-to-date returns for each sector this year. You can generally see how the strongest stocks are among the August laggards, and the weakest stocks have been the August leaders. For those only playing "the trend is my friend," or a continued relative-strength bet, August has not been your strongest month so far.

Sectors ignoring this rotation include homebuilding stocks, represented by the SPDR S&P Homebuilders ETF (NYSEARCA:XHB), and retail stocks, represented by the SPDR S&P Retail ETF (NYSEARCA:XRT), both of which have experienced strong year-to-date price action and good August returns. These are both sectors that we are bullish on because of all the negative sentiment surrounding them, and this performance is yet another positive sign.