Daily ETF Roundup: GDX Shines On Strong Gold, VXX Sinks On Strong Equities

by on November 11, 2011 | ETFs Mentioned:

Major indexes are, as AC/DC once said, “back in black” for 2011, as Friday’s trading session brought a welcomed performance with strong gains. As Veteran’s Day came to a close, the Dow jumped 259 points while the S&P tacked on nearly 2% in trading. Despite the abysmal performance on Wednesday, both of the aforementioned indexes finished the week up, marking the fifth weekly gain over the last six weeks. But the end story hardly tells how the week unfolded as equities endured a brutal session on Wednesday that had investors fleeing for higher ground. Oil posted strong figures today as it closed above $99/barrel and has a good chance of breaking triple digits as next week plays out. Gold also had a good day with an appreciation of over $30/oz. as it makes its way towards $1,800/oz [see also Surprising ETF Standouts Of 2011]. 

The past week was dominated by European headlines, a trend that will likely continue for the near-term future. Though Monday and Tuesday saw positive signs of Greece dropping their referendum, the news of both Italian and Greek leaders stepping down, along with a massive spike in Italian 10-year yields sent equities on a downward spiral in the middle of the week. The closing sessions of the week pushed equities back into positive territory despite exhibiting high volatility. Below, we outline two of the most notable ETF performances on the day [see also Italy ETF Slaughtered: Time To Sell?].

One of the biggest ETF winners on the day came from the Market Vectors TR Gold Miners (GDX), which posted gains of 3.6%. This mining fund, who’s top holdings include Barrick Gold, Goldcorp, and Newmont, has lost just over 2% on the year. As is typical of a mining product, GDX’s high beta makes it something of a leveraged play on the precious metal. So while gold posted gains 1.7% today, GDX was able to double that figure for its investors. This, however, comes at the cost of added volatility that mining funds carry. Despite its strong gains, GDX saw about half of its average daily volume which may simply mean that less investors chose to sell as opposed to few investors buying in on the day [see also Ten ETFs No One Is Thankful For].

One of the biggest ETF losers from this Veteran’s Day trading session came from none other than the S&P 500 VIX Short-Term Futures ETN (VXX). This volatility product has become one of the most effective speculative instruments, as its heavy daily movements provide the opportunity to win big in shaky markets. Today saw a jump in consumer sentiment and confidence, that combined with no bad news from Europe helped push markets higher and simultaneously slug VXX down 4.3%. With one of the most hectic weeks in recent memory, VXX is exhibiting a 5-day volatility of 478% but has still gained 21% on the year [see also Turkey ETF Looks Delicious].

Disclosure: No positions at time of writing.