NEW YORK (TheStreet) -- Many Wall Street analysts and money managers made the wrong call so far this year by saying to avoid Treasuries.
Even with the Dow Industrial Jones Average and the S&P 500 Index setting all-time intraday highs this week, long maturity U.S. Treasury bonds have outperformed stocks so far in 2014.
Analysts and investors have forgotten that the stated purpose of the Federal Reserve's policy is to keep long-term yields low to spur bank lending. With the federal funds rate now projected to stay at 0% to 0.25% at least into mid-2015, U.S. Treasury yields have renewed their decline.
Analysts and investors forget that you can trade bonds like a stock. Their big mistake is assuming that investors will hold a U.S. Treasury to maturity, and so they opine that returns on the U.S. 10-year note yields trading at just 2.55% and the U.S. 30-year bond returning just 3.38%, Treasuries should be avoided. I have been disagreeing with that bad call.
I advocate buy-and-trade strategies, and if investors purchase exchange-traded funds, they should include a bond ETF.
Two "crunching the numbers" tables follow these profiles.
SPDR Dow 30 ETF (DIA) ($166.11, up just 0.4% year-to-date) traded below its 200-day simple moving average when this ETF traded as low as $153.12 on Feb. 5. The ETF is also known as "Diamonds" set an all-time intraday high at $167.29 on Tuesday, well above the 200-day SMA at $158.51.
The weekly chart is positive but overbought with its five-week modified moving average at $163.99. Quarterly and semiannual value levels are $164.18 and $162.05, respectively, with a weekly pivot at $166.61, and semiannual and monthly risky levels at $167.82 and $173.86, respectively.
SPDR S&P 500 ETF (SPY) ($189.06, up 2.4% YTD) traded as low as $173.71 on Feb. 5, staying well above its 200-day SMA, and hit an all-time intraday high at $190.42 on Tuesday with its 200-day SMA at $178.57.
The weekly chart is positive with its five-week MMA at $186.68. Quarterly and semiannual value levels are $185.09 and $176.28, respectively, with a weekly pivot at $187.86 and a monthly risky level at $200.33.
PowerShares QQQ Trust ETF (QQQ) ($87.83, up just 0.3% YTD) set a multiyear intraday high at $91.36 on March 7, and traded as low as $83.28 on April 15, staying above its 200-day SMA now at $83.80.
The weekly chart is positive with its five-week MMA at $87.09. Semiannual and quarterly value levels are $84.59 and $83.64, respectively, with a monthly risky level at $96.63.
iShares 20+ Year Treasury Bond ETF (TLT) ($112.96, up 10.9% YTD) began 2014 trading as low as $101.76 on Jan. 3, after setting a multiyear low on Dec. 31. The bond ETF tracked its 50-day SMA higher with that average now at $109.57. The 2014 intraday high is $113.23 set on Wednesday.
The weekly chart is positive but overbought with its five-week MMA at $110.73 and the 200-week SMA at $110.09. A monthly value level is $109.25 with a weekly pivot at $112.23 and annual and quarterly risky levels at $114.99 and $115.64, respectively.
Crunching the Numbers with Richard Suttmeier: Moving Averages & Stochastics
This table provides the technical status for the stocks profiled in today's report.
There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.
The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.
Interpretations: Stocks below a moving average are listed in red.
Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.
A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.
A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.
A stock with a neutral technical rating has a profile that is not positive or negative.
The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three to five year horizon. (even Apple declined to its 200-week SMA in June 2013)
The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.
The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.
The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12 month horizon.
Crunching the Numbers with Richard Suttmeier: Earnings & Where to Buy & Where to Sell
Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.
Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.
At the time of publication, the author held no positions in any of the funds mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff