This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

As Equities Become Risky, Consider Market ETFs

Stocks in this article: TLTGLDXLEDIAQQQSPY

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.

PowerShares QQQ Trust Series 1  (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.

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

Richard Suttmeier is the chief market strategist at ValuEngine.com. He has been a professional in the U.S. Capital Markets since 1972, transferring his engineering skills to the trading and investment world. Suttmeier has an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. He began his career in the financial services industry in 1972 trading U.S. Treasury securities in the primary dealer community. He became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gives him the insights to be an expert on monetary policy, which he features in his newsletters, and market commentary. Suttmeier's industry licenses include, Series 7 and Registered Principal (Series 24). He has been the Chief Market Strategist for ValuEngine.com since 2008 and often appears on financial TV.

Click here for details on Suttmeier's "Buy and Trade" investment strategy.

Richard Suttmeier can be reached at RSuttmeier@Gmail.com
2 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,380.41 +263.17 1.63%
S&P 500 1,886.76 +24.00 1.29%
NASDAQ 4,258.4380 +41.0480 0.97%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs