Gold Mining Shines During a Tough Week

Jeff Miller submits:

Last week’s market action has some important and interesting messages. We see rapid sector rotation, with a dramatic fall in some of last week’s leaders and soaring ratings for new choices. The overall market rating is mixed — still bullish, but lacking the strength of recent weeks.

We look beneath the overall market averages to find sector strength in our universe of 57 ETFs. The strength may be momentum-based, reflecting recent Trends, or it can represent part of a cyclical pattern in the sector. The process adds a touch of anticipation, so we call it the TCA-ETF system. (The complete current rankings are at the end of the article, along with an explanation of our methodology.)

Falling Sectors

Home Construction (ITB) plummeted from #4 last week to #51 and a place in our “penalty box.” Networking fell from #6 to #44, and also went to the penalty box. These are extremely rapid one-week moves.

Market Averages

While the model retains bullish ratings on the S&P 500 and the Dow, the Q’s are in the penalty box, as is the inverse ETF, the PSQ. This is a neutral rating on the Nasdaq.

Spotlight on the Gold Miners

The ratings star of the week was the Market Vectors Gold Miners ETF (GDX), shooting from #46 to #5 in our ratings. We last featured GDX in November.That article pointed out the low concentration (37% in the top five holdings), the heavy Canadian exposure (67%), and the low correlation with the S&P 500.

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