Today, dear reader, I have a question for you.

Can you tell me, please, what are the three top-performing market sectors over the past six weeks?

The answer might surprise you.

Six weeks ago, the S&P 500 was at 2675. Yesterday it closed near 2840. That’s a 6.2% gain – more than 1% each week – which is pretty remarkable for an index.

The Dow has done even better – gaining 6.3% over the same timeframe. And the NASDAQ is 6.6% higher.

Those are phenomenal returns in a short time period. Heck, many analysts figured the stock market would gain 7% or so during all of 2018. The major indexes have almost achieved that figure in just six weeks.

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Some individual market sectors have done even better. The energy sector (XLE), for example, is the top performer with a 16% gain over the past six weeks. The semiconductor sector (SMH) gets the silver medal with a 12.5% gain.

That probably doesn’t surprise you. The financial television talking heads have been gushing about oil since it broke above $50 per barrel back in October. And semiconductor stocks are traditional market leaders. So it makes sense that the energy and semiconductor sectors are on top of the pack for this remarkable stock market rally.

Besides, you can’t watch CNBC, Fox Business News, or Bloomberg Television for more than a few minutes without hearing about the big gains in energy and semiconductor stocks.

But you probably haven’t heard much about third-place sector. It’s up 12.1% over the past six weeks. Yet almost no one talks about it.

While all the talking heads cheer about the 8% gain in the financial sector (XLF), and the 10% gain in the transportation sector (IYT)…

…the 12.1% rally in gold stocks (GDX) goes unmentioned.

That’s right. Gold mining stocks, as represented by the VanEck Vector Gold Miners Fund (GDX) are up 12.1% over the past six weeks. That’s almost twice the return of the S&P 500 – and it’s good enough to take the third position on the “market leading podium.”

But outside of our humble little group here in the Market Minute, most folks don’t know the gold sector has been ratcheting up gains.

And that’s a good thing.

The farther the gold sector can rally without being noticed, the more likely that rally is to continue. The sooner that television talking heads get excited about a move, the closer that move is to being over.

That’s why I think we have a few more weeks left to the gold stock rally. Most folks still view the sector as they did when it was bottoming six weeks ago.

Here’s what I wrote back then, when I suggested the gold pendulum was starting to turn

The mining sector is the worst-performing group in the entire stock market. It’s hated by nearly every analyst on Wall Street. The financial television talking heads actually laugh at the thought of buying gold stocks. Investor sentiment is about as bearish as I’ve seen it since the bottom of the gold stock bear market back in December of 2015.

Today, the sentiment towards the gold sector is about the same as it was back then. The only thing that’s changed is the sector has rallied 12.1% in the past six weeks.

Don’t tell anyone.

Best regards and good trading,

Jeff Clark

Reader Mailbag

Today, a mixed mailbag…

With a strong US economy, steep tax cuts coming next month, massive dismantlement of regulations, etc. the demise of the USD is the wishful thinking of a Chinese Communist leader.

– Douglass G.

 

The NASDAQ, S&P, and DOW are making fools of you and me. “Waiting for Godot” in gold is painful.

Ray Dalio says we’ll scream higher before blowing off the top and cash is for fools. Cramer agrees

They make money. You lose money. If Armageddon never comes I at least have your six books on my shelves collecting dust.

– Patrick V.

 

I do like your position in GDX, thank you so much for that! I truly trust your opinion, and I REALLY appreciate you!

– Dina P.

 

The iPhone app has become fantastic, very usable, and totally indispensable. Thank you for listening to my comments last year.

– Henry M.

As always, feel free to send in your trading stories, questions, and suggestions right here.

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