"In the 2000s, as we've alternated between deflationary and inflationary worries, gold has been the only major investment to rise every year," says Stephen Leeb.

In his The Complete Investor, he explains, "We think that many miners are exceptional bets today. And among our favorite gold investments is one that we hold in our small cap value model portfolio: NovaGold Resources (AMEX: NG)."

"The case for mining stocks is that the price of gold rises faster than miners' costs, allowing margins to increase.

Analyst upgrades:

• Keefe Bruyette upgraded BB&T (NYSE: BBT) to Market Perform from Underperform as it believes downside risk has been reduced following the company's capital raise. The firm raised its target price to $23 from $15.
  
• Janney Montgomery upgraded FEI Company (NASDAQ: FEIC) to Buy from Neutral on expectations margins will improve and various country stimulus packages will provide benefits in 2010. The firm has a $31 target on the stock.
  
• Citigroup upgraded Tyco Electronics (NYSE: TEL) to Buy from Hold as it believes automotive headwinds are priced in and the company's long-term fundamentals are intact. The firm raised its target price to $25 from $19.
• Barrick Gold (NYSE: ABX) was upgraded to Outperform from Sector Perform at RBC Capital.
  
• J.B. Hunt (NYSE: JBHT) was raised to Overweight from Equal Weight at Stephens.
  
• Roper Industries (NYSE: ROP) was upgraded at Oppenheimer to Outperform from Perform.

Analyst upgrades:

• Banc of America/Merrill upgraded Lincoln National (NYSE: LNC) to Buy from Underperform and raised its target to $17 from $10 citing expectations that the company will "qualify for and accept TARP funding."
  
• Credit Suisse upgraded AU Optronics (NYSE: AUO) to Outperform from Neutral as it believes inventory levels are low end demand is better than expected.
  
• JP Morgan upgraded Shaw Group (NYSE: SGR) to Overweight from Neutral. The firm views the recent pullback in shares as a buying opportunity given the company's attractive nuke position and expected ramp in government spending.
• Patterson-UTI Energy (NASDAQ: PTEN) was upgraded to Buy from Neutral at Goldman.
  
• Barrick Gold (NYSE: ABX) was raised to Overweight from Market Weight at Thomas Weisel.
  
• Stryker (NYSE: SYK) was lifted to Sector Perform from Underperform at RBC Capital.

I confess to being surprised by the extent of the current rally, even after many times warning that bear-market rallies tend to be sudden, violent affairs.

Nevertheless, the facts point to the dramatic advance of the past 10 days (the best seven-day rally since 1939) as still nothing more than a rebound following a sell-off that took prices to a level that had to be attacked by bargain hunters and patient investors alike.

Now, however, the easy part is behind them.

Analyst upgrades:

• Citigroup upgraded Blue Nile (NASDAQ: NILE) shares to Buy from Hold on valuation following the recent sell-off as they believe weakening fundamentals have been factored into estimates and that Blue Nile should benefit from the recent softening of diamond prices. The firm raised its target price to $30 from $20.
  
• Baird upgraded AmSurg (NASDAQ: AMSG) to Outperform from Neutral based on valuation, potential upside from in-line results, good visibility, and FCF yield.
  
• Oppenheimer upgraded DryShips (NASDAQ: DRYS) to Perform from Underperform on valuation following the recent weakness and believes the company is at least halfway through its $500M equity offering.
• UAL Corp (NASDAQ: UAUA) was raised to Buy from Neutral at Banc of America/Merrill.
  
• Mylan (NASDAQ: MYL) was upgraded to Overweight from Equal Weight at Barclays.
  
• Exxon Mobil (NYSE: XOM) was lifted at Deutsche Bank to Buy from Hold.

Here are some highlights from this past week's earnings coverage from BloggingStocks:

• Abercrombie & Fitch Inc. (NYSE: ANF) beat Q4 earnings estimates handily, sending shares higher.
• Activision Blizzard Inc. (NASDAQ: ATVI) did well in the holiday period but offered weak guidance.
• Barclays (NYSE: BCS) one-time gains offset write-downs and said it expects to resume dividend payments.
• Boeing Co. (NYSE: BA) shares fell after it announced that it had understated its Q4 and fiscal 2008 loss.
• Coca-Cola Co. (NYSE: KO) topped Q4 earnings estimates due in part to volume gain internationally.
• Diageo (NYSE: DEO) earnings rose in the first half, but it cut its full-year forecast.
• GSI Commerce Inc. (NASDAQ: GSIC) "solid" Q4 results led to an analyst downgrade.

Caterpillar (NYSE: CAT) is recently at $31.88 in pre-open trading, below its close of $35.66. CAT says 2009 will be a very tough year. CAT reported Q4 sales and revenues rose 14% from 2007. CAT February option implied volatility of 76 is above its 26-week average of 55, according to Track Data, suggesting larger price movement.

Barclays (NYSE: BCS) is recently trading at $4.50 in pre-open trading, above its close of $3.07. BSC said it will avoid further capital increases as revenue grows. BCS overall option implied volatility of 80 is below its 26-week average of 92, according to Track Data, suggesting decreasing price movement.

Barrick Gold (NYSE: ABX) closed at $39.58. Gold is recently up 1.09% to $907.50 according to Bloomberg. ABX is scheduled to report Q4 EPS in late February. ABX March option implied volatility of 72 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

The mythical lore of gold dates to the dawn of man. Whether for jewels, religion or currency, gold's place in history is quite secure.

In the modern day, gold has become more about safe havens for fear mongers ready to declare the end of the world.

These folks will have you believe that the U.S. dollar will be worthless due to inflationary pressures arising out of a printing-press monetary policy. And that the collapse of U.S.-style capitalism necessitates a return to the one thing that we can count on to hold value no matter the circumstances.

Hogwash! Why not just make granite or bricks the de facto currency of choice. Ridiculous, right? But seriously, tell me the difference.

Of course, gold means so much more to the lunatics that believe the precious metal will solve all of their problems. What a joke. The only real utility for gold is aesthetic. The stuff looks nice in the form of baubles and chains. Beyond that, there is little true value.

You can imagine my surprise when I checked the Canadian markets and saw them totally unchanged. After several refreshes when the zeroes didn't budge, I even panicked. Then I saw the headline (how did I miss it before) that trading was halted on the Toronto Stock Exchange and TSX Venture Exchange due to a computer glitch. Not only that, but there's also no estimate when trading will resume.

The exchanges have actually failed to open at the regular time of 9:30 a.m. EST, and as one reporter put it "have been dead in the water since." If this is frustrating and stressful for me, I can't imagine what the mood is like on Bay Street; how traders and other market professionals must feel.

I'm not sure what could be done if there are big swings and news out of the U.S. While it's true the Canadian markets don't totally track their American counterparts, as they're heavily weighted in oil and commodities and react to news from those sectors often, they are still affected by what's going on at Canada's biggest trading partner to the south.

Still, it may not be the end of the world as the Canadian holidays also don't exactly follow the American ones and there are days when the TSE is closed while the American markets are open. Also, there are four alternative trading systems in Canada, two at least have reported to be functioning and operational. While volumes there were higher than usual for these system, they were hardly normal for the market as a whole. No doubt, though, these systems will get a boost following this fiasco.

It seems that everywhere you turn you hear something about the price of gold, from analysts to commercials encouraging you to sell your old jewelry for big bucks. If you're tempted, how about a bit safer investment in the commodity? Let your money work for you -- invest in an Exchange Traded Fund (ETF) that hold shares in several different gold producers, and you can ride the wave of the industry.

Market Vectors Gold Miners ETF (AMEX: GDX) is a perfect opportunity to ride this wave with as the fund's goal is to mimic the price and yield performance of the AMEX Gold Miners index, before fees and expenses. This is a nondiversified fund that is comprised of several well known companies whose main operations involve gold and silver mining.

There are two reasons to buy GDX instead of the SPDR Gold Trust (NYSE: GLD) or the iShares Comex Gold Trust (NYSE: IAU) both of which are pure gold ETFs (you own a share of gold sitting in a safe). First, the ratio between gold and the value of the gold held by miners has been relatively stable for 30 years. But today, the gold miners are selling at 33% of that historical ratio, so bulls say it's better to buy the miners, not the metal. Second, the biggest expense of a mining company is energy. Oil today hit $54 per barrel, down 63% from a peak of $147. This adds to the profits of the Gold Miners.

Gold is trading down $19 today, and pulling several major gold stocks down to new 52 week lows in reaction to the drop in the precious metal.

If you follow gold prices, you know that the past month has not been kind on the commodity, with prices falling from above $900 an ounce a few weeks ago down to its current price of $716.30. Earlier in today's session we actually saw prices trading much lower, breaking through the psychological $700 barrier, and falling all the way down to $695.20 an ounce. This is the first time in 13 months that gold has been under $700, and marks a huge drop from the highs it set back on March 14, when it was at historic highs above $1000 an ounce.

Typically, you would think that recessionary times in America would lead to a rise in gold, but this time around things are a bit different. Not only is America in hard times, but countries all around the world are dealing with their own economic slowdowns, which in turn is pushing currencies around the world lower. As this happens, the dollar, despite the current state of the American economy, has been strengthening against its foreign counterparts. As we all know, gold trades inversely proportionate to the dollar, so any strength in the American currency will result in gold prices dropping, and that is part of what we are seeing right now.

Once again it's ugly out there today. The Dow Jones Industrial Average dropped below 11,000 for the first time in two years, plunging over 2%. The rest of the U.S. stocks are not far behind with both the Nasdaq composite and the S&P 500 down over 2% as well. It's depressing. But you don't have to look far to see a nicer picture, you just have to look up: up north that is.

The Toronto Stock Exchange has fared much better in what has officially become a U.S. bear market. Over the past year, while the S&P 500 sank over 19%, the S&P/TSX Composite index dropped only 3.4%. Year-to-date, while the S&P 500 declined over 16%, the TSX was barely down 1%. And if you stay away from financials on the TSX, you'd fare even better.

How so, you ask, doesn't the Canadian economy closely follows the U.S.'s? It's mostly true as the U.S. is Canada's biggest trading partner and the Canadian economy is intertwined with that of the U.S. For example, some of the layoffs at GM and Ford plants have occurred in Ontario plants, and Canada's unemployment rate edged up to 6.2% in June due to a drop in full-time jobs.

The thing is, though, that the TSX is heavily weighted in mining and oil & gas companies, sectors that have fared better than techs and financials the past year or so. Getting exposure to the Canadian market is very easy since many stocks also trade on U.S. exchanges, the famous of all may be Research in Motion (NASDAQ: RIMM). But there are others, and some of them, the U.S. investor may want to consider.

In a market dancing in bear market territory and with elevated inflation, it certainly doesn't hurt to own a defensive stock or two. And one that fits the bill, with an inflation hedge as a bonus, is Barrick Gold (NYSE: ABX).

Barrick Gold is the world's number one gold producer, with a 2007 production capacity of 8.1 million ounces, and 124.6 million ounces in proved/probable reserves. Analysts see a 20-30% revenue gain in 2008 for ABX, following a solid performance in 2007, due to a higher average gold price and increased production.

What's behind the gold bull market? Three factors: 1) increased use of gold in industrial and commercial applications, 2) rising demand for gold jewelry, and 3) increased reliance on gold and gold shares as an alternative investment. All three trends show only modest signs of abating in 2008. Asia-based jewelry demand looks especially promising in the immediate years ahead. The Reuters F2008/F2009 EPS consensus estimates for ABX are $2.43/$2.60.

Barrick Gold (NYSE: ABX) shares are trading higher today as gold futures have advanced by almost 2%. Gold is being propped up by yet another record high for crude, which investors expect to drive inflation. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on ABX.

After hitting a one-year low of $28.89 in August, the stock hit a one-year high of $54.74 in March. ABX opened this morning at $46.42. So far today the stock has hit a low of $46.00 and a high of $47.00. As of 12:05, ABX is trading at $46.55, up $1.05 (2.3%). The chart for ABX looks neutral and improving, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an August bull-put credit spread below the $37.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 5.3% return in just seven weeks as long as ABX is above $37.50 at August expiration. Barrick would have to fall by more than 19% before we would start to lose money. Learn more about this type of trade here.

Barrick Gold (NYSE: ABX) shares are trading higher today as gold futures are on the move higher. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on ABX.

After hitting a one-year low of $27.79 last June, the stock hit a one-year high of $54.74 in March. ABX opened this morning at $41.06. So far today the stock has hit a low of $40.70 and a high of $41.50. As of 12:10, ABX is trading at $40.73, up 0.29 (0.7%). The chart for ABX looks neutral and improving, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $32.50 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 16.3% return in just four months as long as ABX is above $32.50 at October expiration. Barrick would have to fall by more than 20% before we would start to lose money.

ABX hasn't been below $35 at all since August and has shown support around $38 recently. This trade could be risky if the dollar recovers and gold futures fall, but even if that happens, this position could be protected by the support the stock might find around $37 where it has formed a bottom over the past seven months.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in ABX.