Panic Sparks Gold Rally

by on August 10, 2011 | Updated April 26, 2013 | ETFs Mentioned:

Monday was a dismal day on Wall Street as investors prepared for the worst and ran far from equity markets after the release of S&P’s downgrade of U.S. credit quality to AA+ from its coveted AAA rating. Panic-selling caught on like wildfire and domestic equity indexes slid by as much as 6% on Monday alone, only to fluctuate wildly on Tuesday, and then slump again on Wednesday. Crude oil also fell victim to the violent sell-offs this week and futures contracts dipped as low as $75.71 a barrel on Tuesday, managing to work their way higher above the $80 mark by the end of Wednesday. On the other hand, gold investors couldn’t be happier that pessimism seems to be spewing from every corner of the market, as the precious metal continued its upward trek this week, hitting a new record high of $1,817 an ounce after the closing bell on Wednesday.

This week’s recommendations have posted mixed performance results so far given the rampant sell-offs and general feelings of uncertainty dragging down markets:

Checking In: Trading Ideas

This week, our trading ideas included a long positions in both a commodity and currency ETF, as well as a short position in an emerging market equity fund. Wild volatility continues to dominate global financial markets and likewise our picks have performed a bit under expectations, while still managing to turn out solid results when compared to the broad performance of equity markets as a whole.

Trading Idea #1: Long FXC

Pro Membership Required to Continue Reading ETFdb Pro

To continue reading this article, you must be an ETFdb Pro member. Please login or begin your 14-day free trial to continue reading. There are several benefits to becoming an ETFdb Pro member today:
  • Register on ETFdbAccess to 50+ All-ETF model portfolios. Whether you're a long-term, buy-and-hold investor or a more active trader looking to establish a tactical position, our collection of ETFdb Portfolios has something for everyone.
  • ETFdb Realtime Ratings show you exactly where each fund stacks up next to the competition. Get objective, in-depth, custom research on every ETF.
  • Pro members have Unlimited Excel Download capabilities across the entire database; users can easily download more than 200 data filled paged and also export results to Microsoft Excel from every tool.
  • Get ETF Picks of the Month. For active investors seeking ETF investment ideas, our team analyzes technical and fundamental price drivers of more than 1,400 ETFs to identify both short and longer-term opportunities with a focus on absolute returns. Recommendations are actionable investment ideas that are poised for outperformance over the next week to 90 days.

Begin Your Free 14-Day Trial Now,r:18,s:0