As Equities Become Risky, Consider Market ETFs
iShares 20+ Year Treasury Bond (TLT) ($102.43 vs. $104.52 on Nov. 14) traded as low as $102.16 on Nov. 21 then up to $104.93 on Nov. 26 staying below its 50-day simple moving average at $105.42. The bond ETF trades like a stock and approached this recent low with a low of $102.22 on Thursday. The buy-and-trade strategy assumes that these lows are a tradable short-term double bottom. The upside potential is to its 200-week SMA at $108.51 last tested in late October. This month's value level is $101.04 with my quarterly risky level at $111.43.
SPDR Gold Trust (GLD) ($118.30 vs. $124.27 on Nov. 14) traded as low as $117.23 on Dec. 3 vs. the June 28 low at $114.68. The buy-and-trade strategy is making the judgment that this is a tradable low end of a trading range. The gold ETF has become oversold on its weekly chart with the five-week MMA at $123.17. My monthly value level is $102.38 with a quarterly risky level at $138.20.
Energy Select Sector SPDR Fund (XLE) ($86.14 vs. $87.18 on Nov 14) has been above its 50-day SMA since Oct. 10, and today the 50-day is $85.77. The energy ETF is not a proxy for crude oil, it's a basket of energy stocks. The weekly chart is positive but overbought and a close today below its five-week modified moving average at $86.21 will shift this chart to neutral. The weekly chart for crude oil has oversold momentum and held its 200-week SMA at $92.03 last week. A close on oil above its five-week MMA at $96.88 shifts this chart to neutral. My semiannual value level for the energy ETF is $81.91 with a monthly pivot at $85.89 and semiannual and annual risky levels at $88.35 and $91.08.
If you are having difficulty picking stocks given recent moon-shot or woodshed reactions to earnings reports, you can book profits on specific stocks than allocate fewer dollars into these popular market ETFs.SPDR Dow Jones Industrial Avg ETF Fund (DIA) ($158.12 vs. $158.69 on Nov. 14) set a new all-time high at $161.58 on Nov. 29 which was a test of this month's pivot at $160.99. Diamonds tested its 200-day SMA back on Oct. 9 and has been above its 50-day SMA since Oct. 16. Today these moving averages are supports at $155.43 and $151.09 respectively. The weekly chart is positive but overbought with the five-week MMA at $157.36. If the equity bubble pops the downside risk is to my annual value level at $126.69. If the bubble continues to inflate my semiannual and quarterly risky levels are $164.06 and $167.20. (QQQ) ($85.38 vs. $83.80 on Nov. 14) set a new all-time high at $85.96 on Dec. 2 which is above my quarterly pivot at $85.11. This level was tested as a magnet on Dec. 4. This tech heavy ETF has been above its 200-day SMA all year long and this major support is at $75.06. The weekly chart is positive but overbought with the five-week MMA at $83.19. My semiannual value level is $80.87 with a monthly risky level at $86.51. If the new tech bubble pops the risk is to my annual value level at $60.27. SPDR S&P 500 ETF Trust (SPY) ($178.94 vs $179.23 on Nov. 14) set a new all-time high at $181.75 on Nov. 29 which was a test of this month's risky level at $181.55. The ETF that matches the performance of the S&P 500 has been above its 200-day SMA all year long and this major support is at $165.69. The weekly chart is positive but overbought with the five-week MMA at $177.20. My semiannual value level is $174.10 with the monthly pivot at $181.55 and quarterly risky level at $185.04. If the bubble pops the risk is to my annual value level at $134.74. At the time of publication the author held no positions in any of the stocks mentioned. Follow @Suttmeier This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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