Jan. 8: Trading Bonds, Gold, Utilities, Commodities, Dollar Via ETFs

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

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 is
between its 50-day and 200-day simple moving averages of $125.88 and $124.79, respectively.

The Gold Bullion ETF (GLD) set its 2017 high of $128.32 on Sept. 7, and then crashed to $117.40 on Dec. 12. GLD is above its
50-day and 200-day simple moving averages at $121.32 and $120.86, 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 is well below its 50-day and 200-day simple moving averages of $54.83 and $53.56, 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 has moved
above its 50-day and 200-day simple moving averages of $36.82 and $37.02, respectively.

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 $16.58 on Jan. 4 following the positive effect of the “golden cross” that was confirmed on Oct. 20 when the stock closed at $15.01. This ETF is well above its 50-day and 200-day simple moving averages of $15.75 and $14.73, 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 below its 50-day and 200-day simple moving averages of $24.36 and $24.69, respectively.

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 has been downgraded to negative with the ETF below its five-week modified moving average of $126.12. The ETF remains above its 200-week simple moving average of “reversion to the mean” of $124.04. The 12x3x3 weekly slow stochastic reading slipped to 62.37 last week down from 66.30 on Dec. 29.

Based upon this analysis, buy weakness to the 200-week simple moving average of $124.04, and reduce holdings on strength to my
monthly and quarterly risky levels of $128.67 and $135.08, respectively.

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 is positive with the ETF above its five-week modified moving average of $122.21. 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 rose to 50.54 last week up from 36.00 on Dec. 29.

Based upon this analysis, buy weakness to my monthly and semiannual value levels of $122.75 and $118.74, respectively, and
reduce holdings on strength to my quarterly and annual risky levels of $139.65 and $146.20, 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.

The weekly chart for the Utilities Sector ETF remains negative with the ETF below its five-week modified moving average of $53.76.
The 200-week simple moving average is the “reversion to the mean” at $47.34. The 12x3x3 weekly slow stochastic reading declined to 35.33 last week down from 49.38 on Dec. 29.

Investment Strategy: Buy weakness to the 200-week simple moving average of $47.34, and reduce holdings on strength to my annual, monthly, semiannual and quarterly risky levels of $54.46, $55.88, $58.60 and $59.24, respectively.

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

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

The weekly chart for the junk bond ETF has been upgraded to positive with the ETF above its five-week modified moving average of $36.85 and below its 200-week simple moving average or the “reversion to the mean” of $37.48 last tested during the week of Nov. 14, 2014 when the average was $40.08. The 12x3x3 weekly slow stochastic reading rose to 44.67 last week up from 43.04 on Dec. 29.

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 $37.12, $37.15 and $38.98, respectively.

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

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

The weekly chart for the commodity ETF is positive but overbought with the ETF above its five-week modified moving average of $15.86. The ETF is well below its 200-week simple moving average or the “reversion to the mean” of $19.09, last tested during the
week of July 11, 2014 when the average was $33.40. The 12x3x3 weekly slow stochastic reading rose to 82.70 last week rising above the overbought threshold of 80.00.

Based upon this analysis, buy weakness to my monthly value level of $15.79, and reduce holdings on strength to my annual
risky level of $22.87.

PowerShares DB US Dollar Index Bullish ETF (UUP)

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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 remains negative with the ETF below its five-week modified moving average of $24.21 and below its 200-week simple moving average or the “reversion to the mean” of $24.49. The 12x3x3 weekly slow stochastic reading fell to 36.85 last week down from 48.32 on Dec. 29.

Based upon this analysis, buy weakness to my annual value level of $22.35, and reduce holdings on strength to my semiannual risky level of $27.37.

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