Today saw markets turn south as investors continue to lose confidence. The biggest story on the day was the relatively lackluster performance from Facebook (FB), as the social networking giant made its IPO. While a number of tech IPOs over the last few months have opened with stellar gains, Facebook finished the day almost entirely flat, despite trading at a volume of nearly 600 million. The S&P 500 dropped 0.7% while the Dow lost around 73 points. But no major benchmark was hit as hard as the Nasdaq, which lobbed off 1.2%.
On the commodities side of things gold continued its rally while crude oil continued to bottom out. With prices rapidly approaching $90/barrel it seems that an entry point may be days away and that technical buyers may step in to relieve the commodity of its slide. Other notable futures performances includes soybeans and sugar, which both lost over 2%, while wheat and natural gas both jumped over 5%.
One of today’s big winners came from the SPDR Gold Trust (GLD), which jumped by more than 1%. While gold futures had been sliding over the past few days, technical traders had been taking note and preparing their move. Once gold sank to a certain point, buyers stepped in at a bargain price in hopes of a jump in the precious metal, especially those who feel that QE3 is inevitable. GLD has been relatively flat on the year, but has maintained over $60 billion in assets with an average volume topping 12 million.
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Another, even bigger winner, came from the S&P 500 VIX Short-Term Futures ETN (VXX), which leaped by a full 6.5%. Even by this fund’s standards, a 6.5% movement is relatively large. As selling pressures increased today, VXX was able to profit while investors scrambled in and out of the ETN, more than doubling its average daily volume. The underwhelming debut of FB definitely cooled off markets, as many had expected big things from the stock. As FB continues to trade, and euro pressures continue to mount, VXX will be in focus on a daily basis as the fund has gained roughly 30% in the last two weeks.
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Disclosure: No positions at time of writing.
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