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Tapering or Papering: Gold, Crude Oil in Teen Years

One way to trade crude oil is the Energy Select Sector SPDR (XLE) ($78.30). My quarterly value level is $68.32 with weekly and monthly risky levels at $80.66 and $81.88, and semiannual risky level at $88.35.

Chart Courtesy of Thomson/Reuters

Chart Courtesy of Thomson/Reuters

The Euro Vs. the Dollar Will Maintain a Trading Range. The euro (1.3008) is below its 200-week SMA at 1.3443. My semiannual value level is 1.2477 with monthly and annual pivots at 1.3231 and 1.3257. My annual risky level is 1.4295.

In sum, the down trend for yields remains in tact but will be challenged by the tapering or papering debate over the next several months. Remember that the purpose of quantitative easing by the Federal Reserve is to push long term Treasury yields lower. Yields are significantly higher than they were before QE3 and QE4 were announced. The rate on a 30-Year fixed rate mortgage rose by 53 basis points last week to 4.46%. My conclusion is that quantitative easing has failed its mandate.

Reckless monetary policy caused the gold bubble and the oil bubble and these bubbles have popped.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

Richard Suttmeier has an engineering degree from Georgia Tech and a master of science from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. In 1981 he formed the Government Bond Department at LF Rothschild and helped establish that firm as a primary dealer in 1986. Richard began writing market research in 1984 and held positions as market strategist at firms such as Smith Barney, William R Hough, Joseph Stevens, and Rightside Advisors. He joined www.ValuEngine.com in 2008 producing newsletters covering the U.S. capital markets, and a universe of more than 7,000 stocks. Richard employs a "buy and trade" investment strategy and can be reached at RSuttmeier@Gmail.com.
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