The main three indices rallied again on Wednesday with the Nasdaq and S&P both trading in positive territory throughout the day. The Russell lost ground (-0.70%) on the day and it was in negative territory almost all day.
The Nasdaq was the top gainer once again and this time it was a jump of 1.73%. The S&P gained 1.02% to set another record high and the Dow ended up gaining 0.30%.
As for the sectors, six moved higher on the day while four fell. The energy sector was the worst performer once again with a drop of 2.11%. Utilities were the second worst performer with a loss of 1.11%. That was the second day in a row that those two sectors were the worst performers.
The communication services sector led the way for a second day in a row. It jumped 3.42% on Wednesday after a gain of 0.94% on Tuesday.The tech sector gained 2.03% on the day and that was the second best performer.
My scans produced positive results for a third straight night. This time there were 30 bullish signals and 20 bearish signals.
The barometer rose to 12.6 last night, up from 8.1 on Tuesday.
There was a clear theme on the bullish list last night. Of the 30 bullish signals, 10 were gold or silver ETFs or mining stocks, one of which was the VanEck Vectors Gold Miners ETF (NYSE: GDX). In addition to being on my bullish scan, the fund got a bullish signal from Tickeron’s artificial intelligence trend prediction tool. It showed a 90% chance of a move higher over the next month.
The chart shows an upwardly sloped trend channel forming over the last four months and the ETF just hit the lower rail of the channel. The lower rail is practically sitting right on top of the 50-day moving average and that gives it two layers of support.
Buy to open the October 38-strike calls on GDX at $4.90 or better. These options expire on October 16. I suggest a target gain of 75% and that means the fund will need to reach $46.60. The fund peaked at $45.78 in early August, so it will need to break through that high. The upper rail of the channel is up near $46.40 currently and will be much higher in the next week. I recommend a stop at $39.25.
— Rick Pendergraft
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