How to Trade Bonds, Gold, Crude Oil, Dollar Using ETFs

NEW YORK (TheStreet) -- Volatility in Treasurys, gold, oil and the U.S. dollar offer trading opportunities, and active traders and investors can buy and sell in these markets with exchange-traded funds.

U.S. Treasury yields are consolidating a rising trend from Jan. 30 to May 12. Comex gold has been in a bottoming pattern around its 200-day simple moving average since setting a potential cycle low on Nov. 7. Nymex crude oil has been above its 50-day simple moving average since April 2 after setting a potential cycle low on March 18. The euro has been consolidating weakness versus the dollar since setting a potential cycle low on March 16, influenced by a rising 50-day simple moving average since April 28.

The volatility of these four markets can be captured by trading the following four ETFs which trade like stocks.

Here is the daily chart for the bond ETF:


Courtesy of MetaStock Xenith

Investors seeking the safety of the U.S. Treasury market can trade yields like a stock using the 20+ Year Treasury Bond ETF (TLT). The fund is a basket of U.S. Treasury bonds with maturities of 20 years to 30 years. Note that the price of the bond ETF rises when yields are falling and declines when yields are rising.

The bond ETF closed at $122.71 on Friday and is down 2.5% year to date as yields rose. The ETF set its all-time intraday high of $138.50 on Jan. 30, the day of the lowest yield.

The fund had been above its 200-day simple moving average since March 11, 2014 when the average was $106.45. The chart shows that the fund declined below its 200-day simple moving average of $124.01 on May 4 as yields rose. After trading as low as $118.13 on May 19, the fund is attempting to return to its 200-day simple moving average just as the yield on the 30-year bond has declined to its 200-day moving average.

Investors looking to buy the bond ETF should place a good-till-canceled limit order to purchase the fund if it drops to $114.44, which is a key level on technical charts until the end of the June.

Investors looking to reduce holdings should place a good-till-canceled limit order to sell the fund if it rises to $132.13, which is a key level on technical charts until the end of the year.

Here is the daily chart for the gold ETF.


Courtesy of MetaStock Xenith

The SPDR Gold Shares ETF (GLD), which is backed by gold bullion and matches the performance of Comex gold futures contracts, traded as high as $125.58 on Jan. 22 and then as low as $109.77 on March 17. The fund is below its 50-day and 200-day simple moving averages of $114.89 and $116.74, respectively.

Investors looking to buy the gold ETF should place a good-till-canceled limit order to purchase the fund if it drops to $106.09, which is a key level on technical charts until the end of June.

Investors looking to book profits should place a good-till-canceled limit order to sell the fund if it rises to $136.11, which is a key level on technical charts until the end of June.

Here is the daily chart for the commodity ETF.


Courtesy of MetaStock Xenith

Investors trading crude oil like a stock are using the iShares GSCI Commodity-Index Trust Fund (GSG), which is 70% to 75% weighed to energy and crude oil. The commodity ETF set a low of $18.83 on March 18, which turned out to be a key reversal day with a close above the prior day's high. The fund traded as high as $22.34 on May 6. The commodity index is between its 50-day and 200-day simple moving averages of $20.81 and $23.96, respectively.

Investors looking to buy the commodity ETF should place a good-till-canceled limit order to purchase the fund if it rises above $21.67, which is a key level on technical charts until the end of June.

Investors looking to reduce holdings should place a good-till-canceled limit order to sell the fund if it rises to $23.20, which is a key level on technical charts until the end of June.

Here is the daily chart for the currency ETF.


Courtesy of MetaStock Xenith

Investors looking to trade the greenback should use the Deutsche Bank USD Index (UUP), which represents the U.S. dollar versus a basket of currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc.

The currency ETF traded as high as $26.50 on March 13, and consolidated to as low as $24.47 on May 15. The fund is just above its 50-day simple moving average of $25.44 with its 200-day simple moving averages of $24.10.

Investors looking to buy the currency ETF should place a good-till-canceled limit order to purchase the fund if it drops to $24.10, which is a key level on technical charts until the end of June.

Investors looking to reduce holdings should place a good-till-canceled limit order to sell the fund if it rises to $26.75, which is a key level on technical charts until the end of June.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the funds mentioned.

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