With no signs of relief from the latest round of the ongoing financial crisis and global equity market meltdown this week, the accompanying five-day chart highlights a stock and some funds registering impressive gains in the face of massive losses in former blue chips and mega-cap stocks such as AIG. Thanks to the biggest one-day gain ever for gold today, SPDR Gold Shares (GLD) lead the gainers with an advance exceeding 15% over the last five days. As investors flee to traditional safe havens such as U.S. Treasury Bonds (pushing three-month yields to near zero ) and gold; the precious metals trade is back in a big way and also included a gain of nearly 15% today for iShares Silver Trust (SLV).
PowerShares U.S. Dollar Index Bullish (UUP) lost over 2% today, but is still up about 1% on a year-to-date basis. However, the massive movement back into precious metals today suggests the U.S. Dollar could be in for rough times ahead with a growing federal budget deficit , the recent bailouts of Fannie/Freddie + AIG (an associated debts), and renewed risk aversion by investors for all things associated with major liabilities and uncertainties. Until the financial crisis shows definitive signs of reversing, the UltraShort Financials ProShares (SKF) also provides an excellent trading vehicle to short the entire sector on a leveraged basis without the need for a margin account or trying to find shares to borrow for a single-company short position.
Energy commodities such as oil (USO) and natural gas (UNG) also reversed recent declines and rallied today with gains of over 3% and 8%, respectively. The U.S. Natural Gas Fund is well off its 52-week highs near $64 and is trading flat on a year-to-date basis and I think it will outperform the U.S. Oil Fund on increased seasonal demand this winter and lingering disruptions to supply stockpiles from Hurricane Ike.
The only company included in the five-day chart is Avistar Communications (AVSR), which I first highlighted on September 10 after the Company signed a technology licensing deal with IBM. Avistar conducted a conference call earlier today to provide investors with an update on their business strategy – including the most recent IBM deal, the awarding of U.S. technology patents, the regaining of Nasdaq listing compliance, and providing a bullish outlook on 3Q08 operating results which are due in mid-October.
$1.53 (09/18/08)
