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Trading The Ranges - Bonds, Gold, Utilities, Commodities And Dollar

“Flight to safety” ETFs for U.S. Treasury bonds, gold bullion and utility stocks, junk bonds, commodities, the 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 remains above its 50-day and 200-day simple moving averages of $125.19 and $123.97, respectively.

The Gold Bullion ETF (GLD) set its 2017 high of $128.32 on Sept. 7, and then crashed to $119.78 on Oct. 6. GLD is between its 50-day and 200-day simple moving averages at $121.81 and $120.41, 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.

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 failed below its 200-day and 50-day simple moving averages as expected, as a “Death Cross” looms. The 50-day and 200-day SMAs are $37.06 and $37.03, 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 $16.07 on Nov. 6 on the positive effect of the “golden cross” that was confirmed on Oct. 20 when the stock closed at $15.01.

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 below its 50-day and 200-day simple moving averages of $24.36 and $24.90, 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 ($126.55 on Dec. 1) remains positive with the ETF above its five-week modified moving average of $125.71. The ETF remains above its 200-week simple moving average of “reversion to the mean” of $123.56. The 12x3x3 weekly slow stochastic reading rose to 46.19 last week up from 37.59 on Nov. 24.

Based upon this analysis, buy weakness to my weekly and annual value levels of $125.55 and $105.77, respectively, and reduce holdings on strength to my monthly and quarterly risky levels of $128.93 and $130.26, 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 ($121.59 on Dec. 1) remains neutral with the ETF below its five-week modified moving average of $121.98. This ETF remains above its 200-week simple moving average of $117.97, which is the “reversion to the mean” last tested during the week of July 21 when the average was $118.29. The 12x3x3 weekly slow stochastic reading inched up to 28.21 last week up from 27.15 on Nov. 24.

Based upon this analysis, buy weakness to my semiannual value level of $108.60, and reduce holdings on strength to my monthly and quarterly risky levels of $123.60 and $128.86, 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 ($56.41 on Dec. 1) remains positive with the ETF above its five-week modified moving average of $55.35. The 200-week simple moving average is the “reversion to the mean” at $47.00. The 12x3x3 weekly slow stochastic reading rose to 73.88 last week up from 73.66 on Nov. 24.

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 recent high was an opportunity to reduce holdings at $57.22.

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 ($36.75 on Dec. 1) is neutral with the ETF below its five-week modified moving average of $36.95 and below its 200-week simple moving average or the “reversion to the mean” of $37.59 last tested during the week of Nov. 14, 2014 when the average was $40.08. The 12x3x3 weekly slow stochastic reading rose to 52.48 this week up from 52.40 on Nov. 24.

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)

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

The weekly chart for the commodity ETF ($15.87 on Dec. 1) remains positive but overbought with the ETF 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 $19.51, last tested during the week of July 11, 2014 when the average was $33.40. The 12x3x3 weekly slow stochastic reading slipped to 89.16 last week down from 89.89 on Nov. 24, still well above the overbought threshold of 80.00.

The weekly chart shows how the commodity bubble popped from a high of $34.33 in June 2014 to as low as $12.03 during the week of Jan. 22, 2016. This decline of 65% was followed by a sideways to up pattern that regained momentum as September began. This is a warning that inflationary pressures are starting to simmer below the surface, which could lead to higher interest rates when Jerome Powell takes over as Fed Chief in February.

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 annual risky level of $22.73. This week’s pivot is $16.04.

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 ($24.17 on Dec. 1) remains negative with the ETF just below its five-week modified moving average of $24.31 and below its 200-week simple moving average or the “reversion to the mean” of $24.42. The 12x3x3 weekly slow stochastic reading declined to 64.68 last week down from 72.37 on Nov. 24.

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.