The S&P 500 index was up 9.9 percent this year through Nov. 7. The top two performing sectors of the 10 S&P 500 sectors this year, however, are utilities (up 21.4 percent through Nov. 7) and health care (up 20.7 percent), both defensive sectors of the economy that are supposed to perform better later in the business cycle and in periods of recession. Consumer staples, another defensive sector, has blown away the normally stronger early and midcycle consumer discretionary sector—10.9 percent to 1.7 percent. The three other worst-performing sectors have been energy (–1.4 percent), telecom services (3.6 percent) and materials (4.8 percent).
Most analysts attribute the unusually strong performance of utilities at this stage of the business cycle to investors' search for yield in an environment of ultralow interest rates. While the Fed has ended its quantitative easing program, the yield on the 10-year Treasury bond is a paltry 2.3 percent—down from just over 3 percent at the beginning of the year. With their fat dividends and consistent if uninspiring economic performance, utility stocks have become a popular alternative to fixed-income investments. The strength of health-care stocks and consumer staples is likely a reflection of investors' continuing lack of confidence in the economy.
Read MoreLike it or not, Obamacare's juicing health stocks
"Normally, you want health-care stocks and consumer staples in down markets and consumer discretionary when markets are up," said Jerry Miccolis, manager of the Giralda Fund. He rotates in and out of sector exchange-traded funds based on technical price momentum, not business-cycle indicators. "It's hard to figure."