Feb 12: Trading Bonds, Gold, Utilities, Commodities, Dollar Via ETFs

Investors trade ETFs for bonds, gold, utility stocks, junk bonds, commodities and dollar.

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 $119.79 on Feb. 9. The ETF has been
under a ‘death cross’ since Feb. 7 when the 50-day simple moving average at $124.48 below its 200-day simple moving averages of $124.86.

Courtesy of MetaStock Xenith

The weekly chart remains negative with the ETF below its five-week modified moving average of $122.67, and below its 200-week simple moving average of “reversion to the mean” of $124.36. The 12x3x3 weekly slow stochastic reading slipped to 22.25 last week down from 29.63 on Feb. 2.

Based upon this analysis, reduce holdings on strength to my weekly, monthly and quarterly risky levels of $121.31, $125.34 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 well above its
50-day and 200-day simple moving averages at $123.67 and $121.59, respectively. A short-term warning is the Jan. 25 is the ‘key reversal’ as the close that day was below the low of Jan. 24.

Courtesy of MetaStock Xenith

The weekly chart for the Gold Bullion ETF has been downgraded to negative with the ETF just below its five-week modified moving average of $124.96. GLD is above its 200-week simple moving average, or “reversion to the mean” at $117.81 which held at the December low. The 12x3x3 weekly slow stochastic reading slipped to 79.62 down from 82.25 on Feb. 2 moving 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 quarterly and annual risky levels of $139.65 and $146.20, respectively. My monthly pivot is $125.36.

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%. Now the yield is 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. I suggested that investors reduced holdings. XLU is well below its 50-day and 200-day simple moving averages of $52.19 and $53.37 following the ‘death cross’ that formed on Jan. 29 when the ETF closed at $50.39.

Courtesy of MetaStock Xenith

The weekly chart for the Utilities Sector ETF is negative but oversold with the ETF below its five-week modified moving average of $51.08. The 200-week simple moving average is the “reversion to the mean” at $47.56, which was tested at the Feb. 6 low of $47.37. The 12x3x3 weekly slow stochastic reading declined to 10.91 last week down from 11.47 on Feb. 2 declining further
below the oversold threshold of 20.00.

Investment Strategy: Buy weakness to my weekly value level of $46.91, and reduce holdings on strength to my monthly, annual, monthly, semiannual and quarterly risky levels of $52.76, $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, and then traded as low as $35.36 on Feb. 9. 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 $36.69 and $37.00, respectively.

Courtesy of MetaStock Xenith

The weekly chart for the junk bond ETF has been downgraded to negative with the ETF below its five-week modified moving average of $36.74 and below its 200-week simple moving average or the “reversion to the mean” of $37.39 last tested during the
week of Nov. 14, 2014 when the average was $40.08. The 12x3x3 weekly slow stochastic reading fell to 48.04 last week down from 53.69 on Feb. 2.

Based upon this analysis, buy weakness to my semiannual value level of $33.99, and reduce holdings on strength to my monthly,
annual and quarterly risky levels of $36.72, $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, and this 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 between its 50-day and 200-day simple moving averages of $16.26 and $14.97, respectively.

Courtesy of MetaStock Xenith

The weekly chart for the commodity ETF has been downgraded neutral with the ETF below its five-week modified moving average of $16.34. The ETF is still below its 200-week simple moving average or the “reversion to the mean” of $18.68, last tested during the week of July 11, 2014 when the average was $33.40. The 12x3x3 weekly slow stochastic reading ended last week at 83.58 down from 91.33 on Feb. 2 as this parabolic bubble pops. The ETF is still above the overbought threshold of 80.00.

Based upon this analysis, buy weakness to the 200-day simple moving average at $14.97. M monthly, annual and quarterly pivots
are $16.68, $16.20 and $16.01, respectively. Reduce holdings on strength to my annual risky level of $22.87.

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. The dollar set its 52-week low of $23.08 on Jan. 25,
which was a test of my monthly value level for January. The dollar is below its 50-day and 200-day simple moving averages of $23.90 and $24.41.

Courtesy of MetaStock Xenith

The weekly chart for the bullish dollar ETF remains negative but oversold with the ETF below its five-week modified moving average of $23.72 and is below its 200-week simple moving average or the “reversion to the mean” of $24.54. The 12x3x3 weekly slow stochastic ended last week at 15.88 up from 13.79 on Feb. 2 still below the oversold threshold of 20.00.

Based upon this analysis, buy weakness to my monthly value level of $22.99, 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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