Special Update: Sell Signal In Transports Today; Gold/Silver Buy Signals

Just a quick note tonight after a very interesting day as far as my computer trading system is concerned.

Few would argue with the statement that Transportation stocks have been among the strongest in this 5-year bull market, and especially so over the last 18 months. The Dow Jones Transportation Average gained 108% from its October 2011 bottom to this week's all-time record high. This compares to a 74% gain in the S&P 500 Index over the same period.

Maybe it shouldn't be a surprise, but a daily chart sell signal was triggered within my computer trading system in the Dow Jones Transportation Average Index Fund (symbol IYT) at today's close (see chart below). And if there is additional weakness in this index over the next couple of days, a weekly chart sell signal will almost definitely be triggered as well. As far as I am concerned, if we see a weekly chart sell signal in the Dow Jones Transportation Average this week, the rest of the market will soon follow with a major correction of its own. Picking tops in any market is dangerous, but it's been quite some time since the bulls have been tested with anything more than a 7% correction.

Dow Jones Transportation Average Index Fund (IYT) Daily Chart with Computer-generated Buy & Sell Signals

As interesting as today's sell signal is in the Transportation sector, an even more interesting signal was triggered within the Gold/Silver mining sector today. Daily Chart computer-generated buy signals were triggered in the following Gold/Silver mining stocks:

Agnico Eagle Mines (AEM)              $30.48

Gold/Silver Mining Index (XAU)        $84.98

Barrick Gold (ABX)                          $15.97

Endeavour Silver (EXK)                  $  3.90

First Majestic Silver (AG)                 $  8.44

Fortuna Silver Mines (FSM)             $  3.93

Gold Mining Share ETF (GDX)        $22.37

Newmont Mining (NEM)                   $22.82

The sheer number of buy signals here is incredible! Of course, most of these stocks have been annihilated since their early February 2014 highs, but today's buy signals bode well for the group as a whole over the next several months (at least)! In the interest of full disclosure, I have significant long positions in Endeavour Silver (EXK), First Majestic Silver (AG), Goldcorp (GG), and the Junior Gold Mining Shares ETF (GDXJ). And I am also aggressively short the S&P 500 Index using the Pro-Shares Double Short S&P 500 ETF (symbol SDS).

First Majestic Silver (AG) Daily Chart with Computer-generated Buy & Sell Signlas

Junior Gold Mining Shares ETF (GDXJ) Daily Chart with Computer-generated Buy & Sell Signals