Gold prices have been rocketing higher the past two days. Since the start of the trading day on Wednesday, September 2, gold prices have climbed from just above $950 per ounce to just below $1,000 per ounce.

To put things in perspective, gold prices have only been above $1,000 per ounce on two other occasions---March 2008 and February 2009. Gold prices reached their highest levels on March 17, 2008 (it's quite fitting that the market found the pot of gold at the end of the rainbow on St. Patrick's day, if you ask me) at $1,033.18 per ounce.

Needless to say, this is an extremely important time for gold prices. If they can break up and through resistance at $1,000, we could see an exponential rise in the value of gold. The question is, will you be able to take advantage of rising gold prices?

Despite the U.S. stock market's recent run up, the decline in the U.S. dollar and inflation fears have investors searching for safety in these uncertain times. A popular strategy that has emerged is to hedge market and currency risk with commodities, namely gold, oil, and uranium. What specific stocks and investments in these sectors are likely to outperform?

ETFs like the US Oil Fund (NYSE: USO) and the SPDR Gold Shares (NYSE: GLD) will obviously track any rise or fall in these commodities to a T, but perhaps individual companies in these sectors are a better fit for you. Below are some industry giants, as well as speculative plays that are also drawing attention from investors.

Today was another one of those days where you were never really sure of the bias or tone of the market as it started strong, gave all the gains back, tried to rally, and then gave back all the gains and then some. There were too many moving parts not acting in unison.

The FOMC noted that it was going keep buying securities and there was no hint of higher rates, yet oil inventories fell again and sent commodity prices higher.

Here are today's unofficial closing bell levels:

Dow 8,424.91 -49.94 (-0.59%)
S&P 500 903.81 -4.32 (-0.48%)
Nasdaq 1,727.28 -7.26 (-0.42%)

Top Analyst Calls

United States Oil Fund (NYSE: USO) is recently down $1.07 to $25.98 in pre-open trading. WTI Crude futures are recently down 5.16% to $42.45. USO unit net asset value reflects the performance of the spot price of West Texas intermediate light crude. USO March option implied volatility of 72 is above its 26-week average of 68, according to Track Data, suggesting larger price movement.

Financial Bear 3X (NYSE: FAX) 3X is recently up $8.07 to $70 in pre-open trading. FAZ March 70 straddle is priced at $28.90, April 70 straddle is priced at $39. FAZ over all option implied volatility is at 192 according to Track Data, suggesting extreme price movement.

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

United States Oil Fund (NYSE: USO) is recently down 60 cents to $23.68 in pre-open trading. USO unit net asset value reflects the performance of the spot price of West Texas intermediate light crude. USO March option implied volatility of 78 is above its 26-week average of 67, according to Track Data, suggesting larger price movement.

UltraShort Financials ProShares (NYSE: SKF) is recently up $10.48 to $196.60 in pre-open trading. SKF is an exchange-traded fund seeking daily investment results that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Financials Index. SKF March option implied volatility of 155 is above its 26-week average of 123, according to Track Data, suggesting larger price movement.

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

This post was written by Minyanville contributor Adam Warner:

Smarter minds than yours truly have noted that the oil ETF United States Oil Fund (AMEX: USO) is not the best bullish play on crude here. My understanding of the product is that USO owns futures, and must roll each cycle. And right now oil is in deep contango, which always sounds pornographic but actually just refers to the fact that there's a particularly steep and upward sloped curve in the futures as you go out in time.

I'll take their word for the contango part, but I'm not entirely sure why that necessarily will knock down USO. They'll roll when they roll, and even if the spread is wide, won't it then just depend on what happens in the next month AFTER the roll? I'm thinking out loud here, so if anyone has something enlightening to add on this topic, I am all ears.

I sold and am selling more Nov. puts anyway, so it should not matter a great deal from my standpoint. And I'm not sure I really have a great alternative if I want to do something bullish in oil options.

I don't trade futures or futures options, and as far as pure oil there's Super Double Ultra Octane Special (AMEX: DBO), which does not have liquid options.

There's also Ultra Oil & Gas ProShares (AMEX: DIG) and UltraShort Oil & Gas ProShares (AMEX: DUG), but those track energy stocks.

At this juncture, investors/readers thinking about speculating a little in oil via shares in the United States Oil Fund (AMEX: USO) or via an integrated oil company should think again.

With the U.S. stock market meandering and the nation's economic doldrums continuing, the urge can build in investors, particularly those less-experienced, to try something daring.

However, the oil market is currently in a tug-of-war between the geopolitical concern-oriented bulls and the global economy slowdown-oriented bears.

In other words, the oil market is about as balanced -- or as divided -- as it has been in about two years, so says energy trader Jim Dietz. Oil closed Friday up $1.02 to $125.10 per barrel. Oil is down about 15% from its all-time high of $147.27 registered on July 11, 2008, but is still up about 100% over the past year and about 400% since 2000.

Using a proprietary "volume reversal" trading strategy, Mark Leibovit has been consistently ranked among the top newsletter timers. In his VRTrader, he looks at the outlook for stocks, oil, gold & silver -- and offers his choice for exchange-traded funds for traders to play these markets.

Leibovit explains, "The stock market's decline, besides being huge, is relentless. Every rally was met with selling and fresh lows were soon hit. The Dow crashed through the March and January lows and is now trading at its lowest level since September 2006.

"Apparently, that 1500 point rally off the March low was just a giant head fake. The Dow is now down 19% since last October and the S&P is down 18%, approaching bear market territory."

"Breadth is dismal, and down volume is ten times greater than up volume. Sector action is terrible. Seven of the nine market sectors are down more than 2.5%. Ouch! Financials have done it again and have set a new five-year low. Oil spiked through previous records setting a new record high.

"The precious metals also showed strong gains today with gold up 32.80 to 915.10. We cleared the June 9th high of 907.20 touching 909.50 opening up potential to 931.00 (May 21 high).

Minyanville's top dog, Todd Harrison, dares to ask in public what Wall Street types quietly consider in private. For more insight and ideas, visit

www.Minyanville.com

A few Random Thoughts on the action in crude:

• A finski (a $5 bill) ain't what it used to be - a 10% move at the beginning of last year. Now it's barely 4%.
  
  

• While I've been bearish on crude through the lens of deflation -- and I continue to believe all roads lead there -- "pure trading eyes" sees the sideways action for the last month.
  
  

• United States Oil Fund (AMEX: USO) $104-$113 are the parameters to watch (filling of the gaps versus upside breakout). You can drive a truck through that, I know, but I don't make the rules, I just try to play by them.
  
  

• Hands over eyes, sideways movement under resistance is a bearish churn. The same movement above support is a bullish base.
  
  

• My current position? Flatter than a sat on hat. And I like it that way... For now.

R.P.

Position in USO

I'll alert Minyanville.com readers when Congressional hearings are scheduled to address this other form of speculation, which includes windfall losses.

As for the market, it would seem the largest institutions are equally hopeful -- for the sake of their relative performance -- that this simply can't be: According to some reports I've seen, they're roughly 500 basis points underweight energy.

I'd imagine both will continue to be long shaking heads.

Positions in Energy, Futures and Equities.

With the soaring oil prices, oil bulls have been benefiting from nice gains lately but there are some pessimistic signs that this may be about to change. The Fed's comments related to inflation stirred some worries among investors that interest rates could be lifted soon. A boost in interest rates will immediately lead to a stronger dollar, and could (and should) result in a sell off in crude.

Talking about this circumstance, SmartMoney is thinking about the best way to protect ourselves against losing money. As a first step, SmartMoney suggests that we reduce commodities and increase our allocation in stocks. To back up this idea, the article cites Simeon Hyman, equity strategist of the portfolio advisory group at Lehman Brothers' private investment management unit, who said the company is currently lighter on commodities and "fully invested" in stocks.

David Reilly, director of portfolio strategies at Rydex Investments, is taking into account the possibility of investing in Japan, which "is the most oil-dependent of all major economies. Reilly cites companies such as Toyota Motor (NYSE: TM) and Canon (NYSE: CAJ) which could benefit from investors' attention due to declines in crude oil prices.

In Gold: play the shares, not the metal?, I noted the apparent disconnect between the performance of mining stocks and gold and suggested that the shares may represent a better bet in the near term.

However, there seems to be an even greater disparity in another part of the commodity universe. Over the past 10 months or so, crude oil prices have soared by more than 70%, while energy sector shares have only risen about 5%.

To be sure, there are valid reasons why the stocks might not always track moves in the underlying commodity.

For one thing, the largest energy firms (with the heaviest sector weightings) have fully integrated operations (e.g. they explore for, pump, refine and market petroleum-related products), so a rise in the price of crude oil may not flow directly through to their bottom lines.

Lots of big important news out lately, but I'm not doing anything differently. Nor will I ever. Because I've matured enough over the past decade to sit, wait and strike only when I see all the variables aligned. And that time still is not upon us. By buying The Bear Stearns Companies Inc. (NYSE: BSC), JPMorgan Chase & Co. (NYSE: JPM) may or may not be getting a great deal, but I'm not smart, well-informed or interested enough to really care because there are still too many conflicting variables. I only care for ideal trading opportunities, of which there are none (for my style of trading).

Since January, I've been calling for a 10%+ market drop and warning about a potential disaster not because I'm psychic, but thanks to archaic industry regulations limiting transparency, for industry outsiders, there's really no way how deeply troubled these financial firms are. Judging by Bear's buyout price of $2, even well-informed industry insiders are scared to pay too much to take on such risk.

So, just as when I featured them last week, perfectly downtrending stocks like Sprint Nextel Corporation (NYSE: S), Citigroup Inc. (NYSE: C) and Merrill Lynch & Co. Inc. (NYSE: MER) will probably continue downtrending, only more steeply this week around.

In sharp contrast to the ten horrifically downtrending stocks I warned against buying in this article, today I feature these 10 solidly uptrending stocks.

AK STEEL (NYSE: AKS)
Gilead Sciences (NASDAQ: GILD)
United States Oil (AMEX: USO)
Quicksilver Resources (NYSE: KWK)
Kinross Gold (NYSE: KGC)
Yamana Gold (NYSE: AUY)
streetTRACKS Gold (NYSE: GLD)
Capstone Turbine (NASDAQ: CPST)
Converted Organics (NASDAQ: COIN)
Steel Dynamics (NASDAQ: STLD)

It's charts like theirs that make you wonder why you're messing around with any other stocks. Ahhh, if it was only that easy. No matter that all the stocks listed above are making new highs, now the concern is that they may have come too far too fast. In 2008, several of these stocks-the gold plays in particular-have risen nearly 50%. Obviously the oil stocks have also been surging, but how much further can the "black gold" plays really run?

Over the past six months, the S&P energy sector has risen by 8.3%, outpacing the 5.5% fall in the S&P 500 index by a substantial margin.

Of course, the gains in energy-related shares are modest in comparison to the 51% rise in the price of crude over that same span. History suggests, however, that while the two can slip out of sync for a while, they tend to loosely track one another over the longer term

Under the circumstances, the recent sharp slide in the ratio of the energy index to the price of crude oil suggests the shares may be poised for at least a short-term technical bounce relative to the underlying commodity.

One way to play it (depending on risk tolerance): buy the Energy Select Sector SPDR Fund ETF (AMEX: XLE) and sell (or sell short) the United States Oil Fund LP ETF (AMEX: USO).

Michael Panzner is a 25-year veteran of the global stock, bond, and currency markets and the author of Financial Armageddon: Protecting Your Future from Four Impending Catastrophes and The New Laws of the Stock Market Jungle.