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TheStreet Open House

Ukraine Is Shaky -- How Can Investors Protect Themselves and Profit?

NEW YORK (TheStreet) -- So far this year bonds, gold and crude oil have outperformed the major equity averages. Tensions between Russia and Ukraine have accelerated the momentum of the trends in these markets -- bonds and commodities often rise in response to global uncertainty. The major equity averages have also had upward momentum since early February, but the uncertainties in Ukraine could slow down this momentum.

The consensus in the financial media for 2014 had been to avoid bonds and commodities, and that stocks remain cheap.

So far that has been dead wrong. So how can investors respond to this market, protect themselves and profit?

Today I will present a technical analysis of iShares 20+ Year Treasury Bond (TLT), Comex Gold Futures and Nymex Crude Oil Futures., as well as the major stock and commodity averages. Then I will summarize what may happen to the major equity averages given prolonged tensions related to Ukraine.

Investors can make a more informed investment plan based on these numbers.

A detailed technical analysis chart about these markets follows on page 3. It explains my number-crunching terms and gives an analysis about when to buy or sell.

iShares 20+ Year Treasury Bond ($109.03 yesterday vs. $101.17 on Dec. 31, up 7.8% YTD) trades like a stock. Its components are U.S. Treasuries with maturity dates longer than 20 years. This bond ETF is above four out of five key moving averages shown in my "Crunching the Numbers" table. Monday's intraday high for this ETF at $109.18 is in striking distance of its 200-week SMA at $109.50. The weekly chart has been positive since the first week of 2014. Its five-week modified moving average is at $107.04. My quarterly value level at $105.79 began the year as a pivot, and my annual risky levels are $114.99 and $116.12.

Comex Gold ($1351.20 yesterday vs. $1202.30 on Dec. 31, up 12.4% YTD) is also above four out of five key moving averages in my table. Gold is below its 200-week SMA at $1492. The weekly chart is positive but overbought, with the precious metal approaching my monthly and quarterly risky levels at $1373 and $1385. A breakout above these levels makes the 200-week SMA the next upside target.

Nymex Crude Oil ($104.92 yesterday vs. $98.42 on Dec. 31, up 6.6% YTD) is above all five of the key moving averages in my table and has tested my semiannual pivot at $104.97 on Monday, March 3. My annual and semiannual risky levels are at $107.52 and $110.30. The weekly chart is positive but overbought, with the five-week MMA at $100.50. Note that crude oil has been trading back and forth around its 200-week SMA, now at $93.15, since mid-2009.

Here are my profiles for the major equity averages.

The Dow Jones Industrial Average (16168.03 yesterday vs. 16576.66 on Dec. 31, down 2.5% YTD) came close to 16,400 at last Friday's high, then dipped below my semiannual pivot at 16245. It ended February above this level, but the Dow has not yet challenged its all-time high set on Dec. 31 at 16588.25. The Dow traded below its 50-day SMA at 16155 on Monday, but closed above it. The weekly chart stays positive on a close this week above its five-week MMA at 16117. My annual value levels are 14835 and 13467, with the semiannual pivot at 16245 and monthly, quarterly and semiannual risky levels at 16644, 16761 and 16860.

The S&P 500 (1845.7 yesterday vs. 1848.36 on Dec. 31, down 0.1% YTD) set a new all-time intraday high at 1865.5 on Feb. 28. The S&P is above all five key moving averages shown in today's table. The weekly chart stays positive on a close this week above its five-week MMA at 1828.6. My annual value levels are 1539.1 and 1442.1, with a semiannual pivot at 1764.4 and quarterly and monthly risky levels at 1896.0 and 1930.7.

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