Funds Flow Back Into These Three ‘Flight To Safety’ ETFs

Richard Suttmeier

Despite new highs for the Dow Jones Industrial Average and S&P 500, investor interest remains strong for “flight to safety” investments, treasury bonds, gold bullion and utilities stocks.

The 20+ Year Treasury Bond ETF (TLT)

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The U.S. Treasury 30-Year Bond ETF trades like a stock using the 20+ Year Treasury Bond ETF, which a basket of U.S. Treasury bonds with maturities of 20+-Years to 30-Years. As a stock-type investment it never matures and interest income is converted to periodic dividend payments.

The weekly chart for the Treasury Bond ETF ($125.30 on Aug. 9) is neutral with the ETF above its five-week modified moving average of $124.62 and above its 200-week simple moving average of $121.87 or the “reversion to the mean”, which has been a magnet since the week of Nov. 25 and the week of May 12, when the average was $120.63. The 12x3x3 weekly slow stochastic reading is projected to slip to 53.78 this week down from 56.39 on Aug. 4.

Investment Strategy: Buy weakness to my monthly and annual value levels of $124.57 and $105.77, respectively. My semiannual pivot is $125.69. Sell strength to my quarterly risky level of $136.15.

The Gold Bullion ETF (GLD)

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Investors can trade gold bullion like a stock using the SPDR Gold Shares ETF.

The weekly chart for the Gold Bullion ETF ($121.31 on Aug 9) is positive with the ETF above its five-week modified moving average of $119.47 and above its 200-week simple moving average of $117.87, which is the “reversion to the mean”, tested several times since the week of Feb. 24. The 12x3x3 weekly slow stochastic reading is projected to rise to 53.09 this week up from 45.85 on Aug. 4.

Trading Strategies: Buy weakness to my quarterly value level of $119.28. Sell strength to my monthly and annual risky levels of $124.70 and $160.24, respectively.

The Utilities ETF (XLU)

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Investors seeking the safety of dividends can trade the utilities ETF, which is a basket of 28 utility stocks. This ETF ended has a dividend yield of 3.24%.

The weekly chart for the Utilities ETF ($53.89 on Aug. 9) is positive with the ETF above its five-week modified moving average of $53.10. The ETF is above its 200-week simple moving average or the “reversion to the mean” of $45.69. The 12x3x3 weekly slow stochastic reading is projected to rise to 57.13 this week up from 50.79 on Aug. 4.

Investment Strategy: Buy weakness to my semiannual and annual value levels of $51.98, respectively. Sell strength to my monthly and quarterly risky levels of $56.53 and $56.64, respectively.

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