Buy Bonds, Trade Gold and Sell Crude Oil

NEW YORK (TheStreet) -- The backup in the yields for the Treasury 10-year note (2.602%) and the 30-Year Treasury bond (3.677%) appears to have stabilized around my monthly pivots at 2.601% and 3.702% respectively.

Given a rally in long-dated Treasuries the 10-year yield can decline to my annual pivots at 2.476% and 1.981%, with the 30-Year yield declining to my annual pivots at 3.014% and 2.882%.

You can trade the bond market just like a stock using iShares 20+ Year Treasury Bond ( TLT) ($106.80). My monthly value level at $105.89 held the low on August 1, which was $$105.00. The upside potential is to my annual pivots at $116.26 and $120.42.

Comex gold ($1288.9) appears to have set at tradable low around the June 28 low at $1,179.4 an ounce. This month's pivot is $1,229.7 should center a trading range with the upper end just below $1,350.0.

You can trade the gold market just like a stock using SPDR Gold Trust ( GLD) ($124.15). My monthly value level is $118.93 with the 50-day simple moving average at $127.28 and my annual pivot at $153.45.

The problem with gold stocks is that none of the popular names have buy ratings according to www.ValuEngine.com.

If you want to buy a gold miner I would choose Newmont Mining ( NEM) ($26.48), which traded to a multi-year low at $26.43 on Wednesday. The stock has a hold rating according to ValuEngine, but is 35.8% undervalued and is trading below book value. My monthly value level is $25.85 with a quarterly risky level at $40.92. The company reported earnings on July 25 with a miss of 51 cents resulting in a loss of 10 cents a share.

Crude oil ($104.11) appears to have set a double-top at $109.32 on July 19 and $108.82 on Aug. 2, setting the high end of a trading range just below my semiannual risky level at $109.84. My quarterly value level is $91.75.

You can trade crude oil using the Energy Select Sector SPDR Fund ( XLE) ($82.39). My quarter value level lags at $68.32 with monthly and semiannual risky levels at $86.20 and $88.35.

Since I expect lower energy costs in a fragile economy, I do not have an oils-energy stock that has a buy rating. In my earlier post this morning I noted that SunPower Corp ( SPWR) ($21.58) was taken to the woodshed yesterday. This weakness resulted in an upgrade to buy according to ValuEngine, but buying without a value level is like trying to catch a falling knife.

To sum it up, yields have moved too high too fast, and the Fed's QE3 and QE4 bond purchasing programs should continue. With GDP growth anemic demand for gasoline at the pump fades when the price per gallon rises above $3.50. While gasoline prices rose nationwide, they peaked at $3.59 on Main Street, Tampa Bay, and are down to $3.379 today.

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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