One chart highlights the tug-of-war raging over control of the stock market

Reuters / Michael Buholzer

• S&P 500 intra-sector correlation is close to the lowest on record, showing that industries within the index have been trading independently of one another.
• The offsetting nature of S&P 500 sector moves has been particularly pronounced in the past week as traders rotate out of tech and into financials and telecom.

The next time someone you know conflates low stock market volatility with an overall lack of excitement around equities, be sure to point them to the chart below.

It shows intra-sector correlation - or the degree to which industries in the benchmark S&P 500 index trade independently of one another - sits close to the lowest on record. Weaker only during the tech bubble era, the measure suggests that trading has been heavily polarized on a sector basis.

The reason why overall market price swings have been subdued - with the CBOE Volatility Index, or VIX, sitting close to the lowest ever for much of 2017 - is that these sector fluctuations have offset one another. So while your friend has repeatedly bemoaned the lack of trading opportunities in a low-volatility environment, the true is that there have been shifts happening at the industry level.

Credit Suisse

This dynamic has been in play for much of the past week, which has coincided with the above measure's drop to fresh multi-year lows. On Monday, the S&P 500 slid less than 0.1% as tech stocks, which have led the market higher for much of the year, lost nearly 2%. Balancing that out were gains of more than 1.5% in financial and telecom stocks.

It also perfectly encapsulated trading late last week, in the lead up to the Senate's successful passing of the GOP tax bill, when traders drove a so-called rotation out of expensive tech positions in order to finance purchases of lagging sectors like - you guessed it - financials and telecom. This was especially pronounced on November 29, when the tech-heavy Nasdaq 100 dropped 1.7%, while the S&P 500 was little changed.

"The extreme sector dispersion explains why index moves have been so muted this year, as the market has really been driven by sector rotation," equity derivatives strategist Mandy Xu wrote in a client note.

With that in mind, it looks like low-volatility truthers may need to find a new excuse for their underperforming portfolios.