The only real gain on Thursday was the addition of a new word to our daily vocabulary: contagion. Rioters were out in the streets spreading violence while traders were fat-fingering trades spreading panic. Apparently this is the definition of contagion. At times such as this there are very few stocks that provide safety, except for those related to the global currency, gold.
Of the 1661 stocks analyzed, only 126 advanced, 1530 declined and the remaining 5 were still trying to look up the definition of “contagion”. Stocks that were predominantly above 200-day moving averages just last week in the ratio of 9 to 1 are now only 3 to 1 above. The number of stocks above their 50-day moving averages is even worse, now at only one-third of stocks analyzed. Losses averaged 3.07% on volumes 55% greater than the already high volumes of the day prior. Losses amongst US listed stocks saw declines in small-caps, mid-caps, and large-caps of 3.49%, 3.38%, and 3.25%, respectively. Canadian listed stocks were significantly cushioned from the collapse at a loss of only 0.58%. Returns on the day ranged from a loss of 22.68% for NCI, INC. (NASDAQ:NCIT) to gains of 12.12% for Titanium Metals Corporation (NYSE:TIE).
Analysis has revealed that with a buy date of December 3 and a sell date of February 16, investors have benefited from a total return of 817.55% over the last 9 years.This scenario has shown positive results in 7 of those periods.
Conversely, the best return over the maximum number of positive periods reveals a buy date of August 18 and a sell date of December 19, producing a total return over the same 9-year range of 328.99% with positive results in 8 of those periods.
The buy and hold return for the past 9 years was 70.75%.
Comments:
Gold and related stocks are being sought as a safe-haven from the volatile markets at present, and this is not an uncommon occurrence for this commodity at this time of year.Gold commonly rallies in the month of May as volatility rises coming off of the favorable Q1 earnings season.Great Basin Gold shows many of these characteristics, posting returns averaging 10% between now and July.The stock has rallied to gains of 5% in the last 2 days and as long as the commodity it mines remains in favor, this stock is expected to appreciate.The peak period of seasonal strength in these Gold producers is commonly found around the end of the calendar year for gains in the realm of 30%.
News Headlines for GREAT BASIN GOLD COM NPV (GBG.TO)
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Disclosure: Mr. Vialoux does not own securities mentioned in this report.
Disclaimer: Comments and opinions offered in this report at EquityClock.com are for information only. They should not be considered as advice to purchase or to sell mentioned securities.
Data offered in this report is believed to be accurate, but is not guaranteed.
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