The broad stock market seems to be recovering. In fact, as I mentioned recently, there is growing evidence to suggest that there may be more gains ahead.

My Income Trader Volatility (ITV) indicator is now bullish again on SPDR S&P 500 ETF (NYSE: SPY). (Reminder: This is the award-winning indicator I use to identify trades over at my premium service, Income Trader.) Take a look below…

ITV is also bullish on ETFs tracking the Dow Jones Industrial Average, the Russell 2000 Index, and other major indexes. In fact, the only important index not on an ITV “buy” signal is Invesco QQQ Trust (Nasdaq: QQQ).

But that likely won’t be the case for much longer. QQQ tracks the tech-heavy Nasdaq 100 Index, and while it’s not on a “buy” signal now, it’s very near one.

As long as the week ends with a gain, QQQ should trigger a “buy” on ITV.

The uniformity of the signals tells me we are in a sustainable rally, and we are likely to see significant new highs in the fourth quarter of the year. Strong earnings should be the catalyst for that move.

According to FactSet, the third-quarter net profit margin for the S&P 500 should be 12.3%. That means companies in the index will be reporting an average 0f $0.123 in profit for each dollar of sales. The five-year average net profit margin is 10.9%.

A margin of 12.3% would be the third-highest net profit margin reported for the S&P 500 since FactSet began tracking this metric in 2008, trailing only the previous two quarters.

The strength is broad based, with eight sectors reporting a year-over-year increase in their net profit margins compared to the same quarter in 2020. Analysts also believe net profit margins for the S&P 500 will continue to be above 12.0% for the remainder of 2021 and the first half of 2022.

This shows strong fundamentals are in place for large-cap stocks and that those higher-than-average valuations are justified.

How I’m Trading Right Now

As traders find the right level of valuation for stocks when profits are at record highs and interest rates are at record lows, I am comfortable focusing solely on technicals. And this week, I found a low-risk trade in Pepsico, Inc. (Nasdaq: PEP).

I’ve always found it interesting that PEP — one of the largest food and beverage companies — is listed on the tech-heavy Nasdaq index. This shows me the company is focused on cutting costs rather than maintaining traditions.

You see, all companies pay an annual fee to an exchange to be listed. The New York Stock Exchange fee is about $70,000 a year while NASDAQ costs about $47,000. These are small amounts to a company with more than $76 billion a year in revenue, but I think it shows that management pays attention to small things, and that makes it easier to get the big things right.

Regardless, the technical picture for PEP looks good. Currently, the stock is trading around $161.21. And as you can see in the chart above, it formed a broad base from spring to early summer before jumping higher. Given the bullish chart (and the overall signs we’re seeing in the broader market), I think it is unlikely to fall to that level anytime soon.

Now, rather than simply buying the stock and hoping for the best, we can make a trade that expresses this sentiment — and get paid for doing it. And it’s all thanks to the simple, proven strategy we use over at Income Trader. If all goes according to plan, we’ll make a quick return on our capital in 59 days or less. And because this is a short-term trade, we can turn right around and make a similar trade again for even more income.

Worst-case scenario, we may have to buy the stock outright. But I can think of worse things than having to buy a defensive blue-chip giant like PEP at a discount. (In fact, I recommend using this strategy on stocks you wouldn’t mind owning at a discount anyway.)

Trading this way is the closest thing to having your own personal income machine. It’s easy to learn, and you’ll generate far more income than you ever thought possible. In fact, you could easily generate thousands of dollars per month trading this way.

Go here to learn more about this income-generating strategy right now.