Since the beginning of the 21st century, we've witnessed the inflating and popping of parabolic bubbles in Comex gold and Nymex crude oil, as U.S. Treasury yields declined. The dollar swooned until the crash of 2008, and has been on the rise since then.
The exchange-traded fund that tracks bonds like a stock is the 20+ Year Treasury Bond ETF (TLT) , which is a basket of U.S. Treasury bonds with maturities of 20 to 30 years.
Comex gold can be traded just like a stock using the SPDR Gold Shares ETF (GLD) , which is backed by gold bullion, and Nymex crude oil can be too, via the iShares GSCI Commodity-Index Trust Fund (GSG) , an ETF which is 70% to 75% weighed to energy and crude oil.
You can trade the ups and downs of the dollar just like a stock using the Deutsche Bank USD Index (UUP) , which is basket of currencies including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc.
Today, we will measure the risk and reward for these markets using weekly charts. A negative weekly chart occurs when the weekly close for the market is below its key weekly moving average, with weekly sentiment declining below the overbought threshold of 80.
These charts show the key weekly moving average in red, the 200-week simple moving average in green, and the weekly momentum reading is shown in red in the study at the bottom of the chart. The horizontal line in blue corresponds to the pre-crash of 2008 high.
Here's the weekly chart for the bond ETF.
Courtesy of MetaStock Xenith
The weekly chart for the bond ETF will shift to negative if the close on Friday, Jan. 8, is below its key weekly moving average of $121.62, as the weekly momentum reading is projected to decline to 49.12 this week, down from 50.01 on Dec. 31. The key level to hold is the 200-week simple moving average of $117.83. The moving average can be considered the bull market trend for bonds since mid-2006. If there is a renewed "flight to safety," this ETF could trade as high as $132.45 at some point in 2016.
Investors looking for short-term trades should enter a good-till-canceled limit order to buy this ETF if it declines to $116.95, which is a key level on technical charts until the end of January. Investors looking to reduce holdings in this ETF should enter a good-till-canceled limit order to sell if it rises to $123.59, which is a key level on technical charts until the end of this week.