Here’s what to look for in the action today…

General Trends

The bulls haven’t given up yet. Stocks rallied to a modest new high yesterday.

The S&P 500 is still trading below my 2411 minimum upside target. Most technical indicators have room to run before the reach overbought territory. High-yield bonds are still trending higher.

So, it’s still too early to put on a lot of bearish trades.

But it’s not too early to get defensive. Take some profits off the table. Raise stops on existing positions. Be selective with new long-side trades. And be willing to hold onto your cash.

Here in the Market Minute, I take a look at how the broad markets are setting up each day and give my thoughts on how to trade them.

Let’s start with stocks…


The stock market popped higher out of the gate yesterday. The S&P 500 gapped up to 2400 and then spent the rest of the session trading around that level. As a result, the intraday charts have formed “bull flag” patterns. Take a look at this 60-minute chart of the S&P 500…

This sort of a pattern often resolves with another push higher. You can see a good example of this back on April 24. If something similar happens this time around, then S&P 500 ought to be able to rally to the 2411 target area.

That’s where I’ll be looking to establish some short exposure.

Gold and Gold Stocks

Gold stocks popped higher yesterday morning. Then they reversed their gains. The VanEck Vectors Gold Miners Fund (GDX) closed just barely positive on the day.

This is the opposite of “bottoming action.” Remember, when GDX bottoms, it usually suffers a few days of downside action. Then it gaps lower, exhausts all the selling pressure, and slowly turns around and goes positive on the day.

We saw the opposite of that in GDX yesterday. I won't call it “topping action,” because we haven't seen enough of a rally to call for a top. But this action should lead to at least another down day or two. And it should give traders a good chance to add exposure to the mining sector at slightly lower prices.

GDX should form a higher low on this pullback – maybe something around the $21.50 level. The 9-day exponential moving average at $22.17 is the next support level. But we could get a quick flush below support just to shake out all the folks who chased the gold sector higher yesterday.

If you bought into the mining sector last week, and took some profits off the table yesterday morning as I suggested, then you’re in good shape here. Be ready to add back some gold stock exposure after another day or two of weakness.

I’ll update Delta Report readers on these trends throughout the day on Jeff Clark Direct.

Best regards and good trading,

Jeff Clark

P.S. Did you pocket a win from gold stocks these past couple weeks? Be sure to email me right here and let me know.