March 19: Trading Bonds, Gold, Utilities, Commodities, Dollar Via ETFs

Richard1944

The 20+ Year Treasury Bond ETF (TLT)

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 Treasury Bond ETF traded to its 52-week high of $129.56 on Sept. 7, then declined to $116.51 on Feb. 21. The ETF has been under a ‘death cross’ since Feb. 7 when the 50-day simple moving average closed below the 200-day simple moving average. The close on Feb. 7 was $118.56. The 50-day and 200-day SMAs are now $120.71 and $124.41, respectively.

The weekly chart remains negative but oversold with the ETF below its five-week modified moving average of $120.00, and below its 200-week simple moving average of “reversion to the mean” of $124.53. The 12x3x3 weekly slow stochastic reading up-ticked to 15.63 last week up from 13.63 on March 9 still below the oversold threshold of 20.00.

Based upon this analysis, buy weakness to my weekly value level of $114.31, and reduce holdings on strength to my monthly and quarterly risky levels of $122.32 and $135.08, respectively.

The Gold Bullion ETF (GLD)

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

The Gold Bullion ETF set its 52-week high of $129.51 on Jan. 25 up from a low of $117.40 on Dec. 12. GLD is now below its 50-day simple moving at $126.15 and above its 200-day simple moving average at $122.47. A short-term warning called a daily ‘key reversal occurred on Jan. 25 when the close was below the low of Jan. 24 after setting the 2018 high.

The weekly chart for the Gold Bullion ETF is negative with the ETF below its five-week modified moving average of $125.40. GLD is above its 200-week simple moving average, or “reversion to the mean” at $117.84 which held at the December low. The 12x3x3 weekly slow stochastic reading slipped to 56.73 down from 72.63 on March 9 trending below the overbought threshold of 80.00.

Based upon this analysis, buy weakness to my semiannual value level $118.74, and reduce holdings on strength to my monthly, quarterly and annual risky levels of $128.92, $139.65 and $146.20, respectively.

The Utilities ETF (XLU)

Investors seeking the safety of dividends can trade the utilities ETF, which is a basket of 28 utility stocks. At the highs when I suggested booking profits the dividend yield was around 3%. Recently this yield rose above 4%, too cheap to ignore.

The Utility Stock ETF set its all-time intraday high of $57.23 on Nov. 15, which was a test of my quarterly risky level of $57.22 at that time. XLU is above its 50-day simple moving average of $49.44 and below its 200-day simple moving averages of $53.06. A ‘death cross’ formed on Jan. 29 when the ETF closed at $50.39.

The weekly chart for the Utilities Sector ETF has been upgraded to positive with the ETF above its five-week modified moving average of $50.22. The 200-week simple moving average is the “reversion to the mean” at $47.74, which was tested at the Feb. 6 low of $47.37. The 12x3x3 weekly slow stochastic reading rose slightly to 24.88 last week up from 21.40 on March 9 rising above the oversold threshold of 20.00.

Investment Strategy: Buy weakness to my weekly value level of $48.22, and reduce holdings on strength to my monthly, annual, semiannual and quarterly risky levels of $53.55, $54.46, $58.60 and $59.24, respectively.

SPDR Bloomberg Barclay’s High Yield Bond ETF (JNK)

Investors should avoid junk bonds as they correlate more to stocks than U.S. Treasuries.

The Junk Bond ETF set its 52-week high of $37.46 on July 26, 2017 and then traded as low as $35.36 on Feb. 9, following the trend for stocks. The ETF has been below a ‘death cross’ since Dec. 7 when the ETF closed at $36.74. The 50-day and 200-day simple moving averages are now $36.36 and $36.87, respectively.

The weekly chart for the junk bond ETF is negative with the ETF below its five-week modified moving average of $36.23 and below its 200-week simple moving average or the “reversion to the mean” of $37.24 last tested during the week of Nov. 14, 2014 when the average was $40.08. The 12x3x3 weekly slow stochastic reading slipped to 42.97 last week down from 44.75 on March 9.

Based upon this analysis, buy weakness to my semiannual value level of $33.99. Reduce holdings on strength to my monthly, annual and quarterly risky levels of $36.58, $37.15 and $38.98, respectively.

iShares S&P GSCI Commodity-Indexed Trust ETF (GSG)

The commodity ETF is heavily-weighted to energy by about 60%.

The Commodities ETF set its 52-week low of $13.16 on June 21, 2017 and then heavily-weighted to energy futures ETF traded as high as $17.22 on Jan. 25, following the positive effect of the “golden cross” that was confirmed on Oct. 20 when the ETF closed at $15.01. This ETF is now below its 50-day simple moving average of $16.51 and well above its 200-day simple moving averages of $15.20.

The weekly chart for the commodity ETF is negative with the ETF below its five-week modified moving average of $16.36. The ETF remains below its 200-week simple moving average or the “reversion to the mean” of $18.26, last tested during the week of July 11, 2014 when the average was $33.40. The 12x3x3 weekly slow stochastic reading declined to 56.44 last week down from 60.64 on March 9.

Based upon this analysis, buy weakness to the 200-day simple moving average of $15.20 and rising each day. My annual and quarterly pivots are $16.20 and $16.01, respectively. Reduce holdings on strength to my monthly risky level of $17.28.

PowerShares DB US Dollar Index Bullish ETF (UUP)

Investors interested in buying the dollar versus a basket of currencies trade this ETF. It includes below long the dollar vs. Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

The Dollar ETF has been trading lower since testing $24.75 on Oct. 27, 2017. The dollar set its 52-week low of $23.08 on Jan. 25, which was a test of my monthly value level in January. The dollar is above its 50-day simple moving average of $23.53 and below its 200-day simple moving averages of $24.18.

The weekly chart for the bullish dollar ETF has been upgraded to positive with the ETF above its five-week modified moving average of $23.59 and is below its 200-week simple moving average or the “reversion to the mean” of $24.59. The 12x3x3 weekly slow stochastic rose to 29.11 last week up from 25.13 on March 9.

Based upon this analysis, buy weakness to my monthly value level of $23.19, and reduce holdings on strength to my semiannual risky level of $27.37. Quarterly and annual pivots are $24.01 and $24.18, respectively.

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