Trading Bonds, Gold, Utilities, Commodities, The Dollar Via ETFs

Richard Suttmeier

The Treasury Bond ETF (TLT) traded to its 2017 high of $129.56 on Sept. 7, and then declined to $122.42 on Oct. 25. The ETF remains above its 50-day and 200-day simple moving averages of $125.31 and $124.13, respectively.

The Gold Bullion ETF (GLD) set its 2017 high of $128.32 on Sept. 7, and then crashed to $118.10 on Dec. 7. GLD is now below its 50-day and 200-day simple moving averages at $121.48 and $120.45, respectively.

The Utility Stock ETF (XLU) set its all-time intraday high of $57.23 on Nov. 15, which was a test of my quarterly risky level of $57.22, where positions were reduced. XLU remains above its 50-day and 200-day simple moving averages of $55.09 and $53.38, respectively.

The Junk Bond ETF (JNK) set its 2017 high of $37.46 on July 26, and then traded as low as $36.28 on Nov. 15. The ETF ended last week below a “Death Cross” where the 50-day simple moving average of $37.00 crossed below the 200-day simple moving average of $37.02, which indicates that lower prices lie ahead.

The Commodities ETF (GSG) set a post-election low of $13.16 on June 21, and this heavily-weighted to energy futures ETF traded as high as $16.07 on Nov. 6 on the positive effect of the “golden cross” that was confirmed on Oct. 20 when the stock closed at $15.01. This ETF is above its 50-day and 200-day simple moving averages of $15.38 and $14.64, respectively.

The Dollar ETF (UUP) traded to its post-election low of $23.66 on Sept. 8 and rebounded to as high as $24.75 on Oct. 27. The dollar is now between its 50-day and 200-day simple moving averages of $24.38 and $24.86, respectively.

The 20+ Year Treasury Bond ETF (TLT)

Courtesy of MetaStock Xenith

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 ($126.69 on Dec. 8) remains positive with the ETF above its five-week modified moving average of $125.90. The ETF remains above its 200-week simple moving average of “reversion to the mean” of $123.65. The 12x3x3 weekly slow stochastic reading rose to 53.92 last week up from 46.19 on Dec. 1.

Based upon this analysis, buy weakness to my annual value level of $105.77, and reduce holdings on strength to my weekly, monthly and quarterly risky levels of $127.32, $128.93 and $130.26, respectively.

The Gold Bullion ETF (GLD)

Courtesy of MetaStock Xenith

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

The weekly chart for the Gold Bullion ETF ($118.48 on Dec. 8) has been downgraded to negative, but this ETF has held its 200-week simple moving average or “reversion to the mean at $117.95. This level is thus the key technical support for this week. The ETF is below its five-week modified moving average of $121.28, with its 12x3x3 weekly slow stochastic reading slipping to 25.52 last week down from 28.21 on Dec. 1.

Based upon this analysis, buy weakness to my semiannual value level of $108.60, and reduce holdings on strength to my weekly, monthly and quarterly risky levels of $122.56, $123.60 and $128.86, respectively.

The Utilities ETF (XLU)

Courtesy of MetaStock Xenith

Investors seeking the safety of dividends can trade the utilities ETF, which is a basket of 28 utility stocks.

The weekly chart for the Utilities Sector ETF ($55.87 on Dec. 8) remains positive with the ETF above its five-week modified moving average of $55.56. The 200-week simple moving average is the “reversion to the mean” at $47.09. The 12x3x3 weekly slow stochastic reading rose to 74.17 last week up from 73.88 Dec. 1.

Based upon this analysis, buy weakness to my annual value level of $50.72, and reduce holdings on strength to my quarterly and semiannual risky levels of $57.22 and $57.58, respectively. The Nov. 15 high of $57.23 was an opportunity to reduce holdings at $57.22.

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

Courtesy of MetaStock Xenith

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

The weekly chart for the junk bond ETF ($36.76 on Dec. 8) is negative with the ETF below its five-week modified moving average of $36.91 and below its 200-week simple moving average or the “reversion to the mean” of $37.57 last tested during the week of Nov. 14, 2014 when the average was $40.08. The 12x3x3 weekly slow stochastic reading slipped to 52.23 last week down from 52.48 on Dec. 1.

Staying below the five-week MMA and the 200-week SMA is a warning that the re-inflating of the junk bond bubble is ending.

Based upon this analysis, buy weakness to my semiannual value level of $35.47, and reduce holdings with this ETF between my quarterly and monthly pivots of $36.74 and $37.48, respectively.

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

Courtesy of MetaStock Xenith

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

The weekly chart for the commodity ETF ($15.54 on Dec. 8) remains positive but overbought with the ETF just above its five-week modified moving average of $15.52. The ETF is well below its 200-week simple moving average or the “reversion to the mean” of $19.43, last tested during the week of July 11, 2014 when the average was $33.40. The 12x3x3 weekly slow stochastic reading slipped to 86.55 last week down from 89.16 on Dec. 1, still well above the overbought threshold of 80.00.

Based upon this analysis, buy weakness to my monthly and quarterly value levels of $14.85 and $12.40, respectively, and reduce holdings on strength to my weekly risky level of $16.57.

PowerShares DB US Dollar Index Bullish ETF (UUP)

Courtesy of MetaStock Xenith

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 weekly chart for the bullish dollar ETF ($24.44 on Dec. 8) has been upgraded to neutral with the ETF above its five-week modified moving average of $24.33 and just above its 200-week simple moving average or the “reversion to the mean” of $24.43. The 12x3x3 weekly slow stochastic reading declined to 60.31 last week down from 64.68 on Dec. 1.

Based upon this analysis, buy weakness to my monthly and annual value levels of $23.08 and $22.89, respectively, and reduce holdings on strength to my semiannual risky level of $27.01. My quarterly pivot is at $24.95.

Comments

Traders Club

FEATURED
COMMUNITY