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Playing Defense With Treasuries And Utilities

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 ($121.10 on April 6) is above its 50-day simple moving average at $119.62 and below the 200-day simple moving average at $124.07.

The weekly chart remains positive with the ETF above its five-week modified moving average of $120.54, and below its 200-week simple moving average or “reversion to the mean” of $124.66. The 12x3x3 weekly slow stochastic reading rose to 33.73 last week up from 26.68 on March 29.

Based upon this analysis, buy weakness to my weekly value level of $119.27 and reduce holdings on strength to my monthly risky level of $123.62. My quarterly pivot is $122.01.

The Gold Bullion ETF (GLD)

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

The Gold Bullion ETF ($126.39 on April 6) is just above its 50-day simple moving at $126.19 and above its 200-day simple moving average at $122.87.

The weekly chart for the Gold Bullion ETF is neutral with the ETF just above its five-week modified moving average of $125.94. GLD is above its 200-week simple moving average, or “reversion to the mean” at $117.91 which held at the December low. The 12x3x3 weekly slow stochastic reading slipped to 55.61 last week down from 57.99 on March 29.

Based upon this analysis, buy weakness to my semiannual value level $118.74 and reduce holdings on strength to my monthly risky level of $127.48. My quarterly pivot is $125.73.

The Utilities ETF (XLU)

Investors seeking the safety of dividends can trade the utilities ETF, which is a basket of 28 utility stocks. The current dividend yield is 3.06%.

The Utility Stock ETF ($50.42 on April 6) is above its 50-day of $49.68 and below its 200-day simple moving averages of $52.78.

The weekly chart for the Utilities Sector ETF is positive with the ETF above its five-week modified moving average of $50.16 and above its 200-week simple moving average or ‘reversion to the mean’ at $47.86, which was tested at the Feb. 6 low of $47.37. The 12x3x3 weekly slow stochastic reading rose to 44.13 last week up from 36.26 on March 29.

Investment Strategy: Buy weakness to the 200-week simple moving average of $47.86 and reduce holdings on strength to my monthly, quarterly and annual risky levels of $52.02, $52.62 and $54.46, 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 ($35.74 on April 6) is below its 50-day and 200-day simple moving averages at $36.05 and $36.77, respectively.

The weekly chart for the junk bond ETF is negative with the ETF below its five-week modified moving average of $36.00 and below its 200-week simple moving average or the “reversion to the mean” of $37.15 last tested during the week of Nov. 14, 2014 when the average was $40.08. The 12x3x3 weekly slow stochastic reading slipped to 31.22 down from 35.29 on March 29.

Based upon this analysis, buy weakness to my semiannual value level of $33.99 and reduce holdings on strength to my annual risky levels of $37.15. My monthly pivot is $35.95.

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

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

The Commodities ETF ($16.30 on April 6) is between its 50-day and 200-day simple moving averages of $16.46 and $15.39, respectively.

The weekly chart for the commodity ETF is neutral with the ETF just below its five-week modified moving average of $16.44 and below its 200-week simple moving average or the “reversion to the mean” of $18.01, last tested during the week of July 11, 2014 when the average was $33.40. The 12x3x3 weekly slow stochastic reading rose to 56.95 last week up from 56.54 on March 29.

Based upon this analysis buy weakness to the 200-day simple moving average at $15.39 and rising each day. My annual pivot is $16.20. Reduce holdings on strength to my quarterly and monthly risky levels of $17.17 and $17.23, respectively.

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 ($23.63 on April 6) is above its 50-day simple moving average of $23.48 and below the 200-day simple moving averages of $24.08.

The weekly chart for the bullish dollar ETF is positive with the ETF just above its five-week modified moving average of $23.58 and is below its 200-week simple moving average or ‘reversion to the mean’ of $24.63. The 12x3x3 weekly slow stochastic rose to 41.54 last week up from 35.46 on March 29.

Based upon this analysis, buy weakness to the 50-day simple moving average which is rising each week to $23.48 and reduce holdings on strength to my quarterly and semiannual risky levels of $24.82 and $27.37, respectively. My monthly and annual pivots are $23.75 and $24.18, respectively.

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