Yesterday silver rallied to a new high after Tuesday’s big move that brought big gains to several key mining stocks. This morning the DOW, Nasdaq, and S&P 500 are both gapping above their 50-day moving averages. If they can hold those gains today this will be an important day, because they have trapped between the 50-day moving average and 200-day moving average for the past four weeks.
To win in the markets you want to be in the best sectors of the market and avoid the worst ones. Gold, silver, and the mining stocks remain at the top and continue to go up in a stairway to heaven rally defined by low volatility.
I want to point out to you today one sector that is also outperforming the stock market and actually made a new 52-week high yesterday. Take a look at the VNQ ETF, which is the Vanguard Real Estate ETF.
This ETF made a new yesterday. REIT’s are going up as more and more people are looking for anything to pay a dividend now. The VNQ ETF yields a 3.62% dividend, which is now a larger rate of interest than people can get from almost all bonds as the ten year Treausury bond is now yielding less than 1.55%!
The only caveat with this sector is that it tends to pullback when the stock market has corrections so I personally am just watching it for now and waiting to get involved in this sector at a later date.
One I think is best to avoid at all costs now though is the biotech sector as it is badly lagging the stock market. Take a look at the BBH ETF.
This ETF is already below its 200-day moving average and as you can see from the relative strength plot at the bottom is lagging the S&P 500. Sectors that lag like this tend to lead on the downside and fall more than the stock market does when it has a correction.
Right now there is no other sector as promising as the mining stocks to make money in as they are performing better than the stock market averages and even popular stocks such as CGC, AAPL, and ACB. If you want get be a part of this trend I believe the best thing you can do is join my private Power Investor trading group. To do that go here:
http://wallstreetwindow.com/join-power-investor/
-Mike
