Traders felt ghoulish on Friday as they pulled the Dow Jones Industrial Average down 250 points (2.5 percent). All said, the Dow was largely flat for the month of October, rising just .45 percent. Gold hit a rough patch starting on Oct. 20, when the dollar showed unexpected signs of strengths, but the precious metal still posted gains of 4 percent on the month.

Uncertain times are back upon us it seems. The VIX (Chicago Board Options Exchange Volatility Index), which tracks volatility in the options market, surged some 24 percent on Friday. That’s the biggest gain in more than a year. And it’s got a lot of traders thinking there’s going to be a major correction in the markets.

All the ingredients for a large-scale stock sell-off are in place: currency traders are moving into the dollar, gold is rising, and equities are dropping. Even President Barack Obama was in on the game, claiming that the country will “likely see further job losses in the coming days.” That’s a vote of no confidence as the October unemployment numbers are due next week.

Many are predicting that the national unemployment rate will rise above it’s current 9.8 percent this week. If the rate tops 10 percent, except a broader sell-off, and more uncertainty in the market. That bodes well for the dollar and gold, but no so well for the everyday Americans in the trenches. The unemployment numbers will be released on Thursday Nov. 5, 2009, at 8:30 a.m., EST.

Among serious gold collectors, “collector’s coins” are generally worth less than coins issued by official government mints. You’ll be lucky to get 92-94 percent of the current spot price for gold when you try to sell it, according to About.com. In some cases, these coins won’t even be made out of gold or silver, but they’ll look as if they are.

About.com recommends avoiding coins from the following entities:
    •  The Franklin Mint
    •  Bradford Exchange

The moral? Stick with coins issued by governmental entities, so that you can ensure you’ll get the best resale price. True collectors will pay for the underlying gold in government-issued coins, and they might pay above and beyond the spot price if the governmental coin is a particularly rare issue. Check out our post on How to Invest and Buy Gold Bullion and Gold Coins.

On the heels of gold bullion’s five-day losing streak, GLD (a gold trust that tracks the price of gold) is flirting with $99 per share. Very loosely, the fund’s shares trade at about a tenth of the spot price for an ounce of gold. On Oct. 6, 2009, GLD broke through the $100 mark for the first time since its inception in 2004. The fund has dropped nearly 3 percent in the past five days, but seemed to resist falling below $100.

The dollar, which tends to move in an inverse relationship with the price of gold, has shown strength as a spate of economic news seems to be indicating that inflation isn’t on the horizon anytime soon. New home sales were some 38,000 homes short of analyst predictions. That figure – along with the lackluster durable goods report – forced some banks to lower their forecasts for third-quarter U.S. GDP growth (which will be announced at 8:30 a.m. on Oct. 29, 2009).

Goldman Sachs cut their gross domestic product estimate from 3 percent third quarter growth to 2.7 percent. Weaker numbers will likely take some of the steam out of claims that “the recession is over” as the U.S. is poised to show it’s first signs of GDP growth in more than a year.

Junior mining stocks were hit hard by a decline in gold prices. Among the biggest losers (and perhaps best buys at the moment):

    •  MGN, Mines Management, Inc., AMEX -13.9%
    •  EGI, Entree Gold, Inc., AMEX -10.8%
    •  SA, Seabridge Gold, Inc., AMEX -10.7%
    •  HL, Hecla Mining Company, NYSE -10.6%
    •  NG, NovaGold Resources, Inc., AMEX -9.2%

Zecco.com generated a lot of buzz when it was launched in 2006. The company was founded on a radical premise: using high-volume traders to cover costs for low-volume traders. That way Zecco could give away free stock trades as a way to entice new customers and retain old ones. This year Zecco raised the equity requirements to get free trades, but they’ve still got among the lowest trading rates in the country: $4.50 per trade.

Their prices have helped drive down costs at other major online brokers (including eTrade, which charges $13 per trade), and those low costs have helped Zecco grow to 170,000 accounts. Today, the company announced that it’s founder and CEO, Jeroen Veth, will be stepping down on Jan. 1, 2010. His Chief Information Officer, Michael Raneri, will take the reins then, with the promise that he’ll “put a major emphasis on revolutionizing our trading experience and continuing to improve our customer service.”

If Raneri’s past track record is any indication, stock traders can expect big things from him. After all, he’s the man who helped propel Charles Schwab into the 21st Century when he spearheaded the launch of Schwab.com. Since I’m an active trader at Zecco.com, here are a few suggestions for the company’s new CEO:

    •  Offer extended-hours trading. Waiting until the bell on the NYSE puts Zecco traders at a competitive disadvantage.
    •  Extend offerings to foreign exchanges. The ability to trade shares in Hong Kong, Toronto, Mexico City, etc., would strengthen Zecco’s appeal to traders with deeper pockets.
    •  Improve the site’s stock charts. Frankly, they’re terrible. At the very least, they should load in-page via AJAX or Javascript. Google Finance is the industry leader here, and they give their charts away for free.
    •  Offer news reported by Zecco.com staff members. Announcing IPOs, stock splits and unusual price movements would likely spur traders to act. Best of all, Zecco has a built-in alert system that will tip them off to news: they can detect high-interest in a particular stock by tracking their users’ trades.
    •  Create an iPhone app for trading on Zecco.com. The ability to trade on the go would definitely increase the company’s trade volume, and the ubiquity of the phone might help Zecco tap new users.

All that said, Zecco.com is showing remarkable growth (a 72% year-over-year increase in accounts, according to Reuters). The staff at Zecco probably has a slate of improvements they’d like to make, but we’re still interested to see the direction Raneri takes as Zecco’s new head.

Click here to open a Zecco Trading account

Update: Zecco.com’s future CEO, Michael Raneri, commented on this post: “Fred, Thanks for the suggestions. I hope you will be pleased to learn that many if not all of these ideas are actively being worked on here at Zecco. Stay tuned!”