Investors should not overlook investment and trading opportunities in the exchange-traded funds that represent Treasury bonds, gold bullion, utility stocks and junk bonds.
The best investment in the 30-year U.S. Treasury bond yield is the 20+ Year Treasury Bond ETF (TLT) . Gold bullion investors use the SPDR Gold Shares ETF (GLD) . Investors seeking dividends buy the Utilities Select Sector SPDR Fund (XLU) . And investors in high-yield bonds buy the SPDR Barclays High Yield Bond ETF (JNK) .
Here's how the underlying investments are performing now.
The yield on the 30-year U.S. bond rose to 3.215% on Dec. 12 and then declined to as low as 2.936% on Jan. 6, failing at its 50-day simple moving average of 2.950%. My semiannual value levels are 3.302% and 3.467% with an annual value level of 4.137%. My quarterly and monthly risky levels are 2.790% and 2.536%, respectively, with an annual risky level of 2.276%.
Comex gold futures traded as low as $1,124.3 the Troy ounce on Dec. 15, then rebounded to as high as $1,185.9 on Jan. 5. My semiannual value levels are $918.7 and $727.5. My quarterly and monthly risky levels are $1,196.0 and 1,212.4, respectively, with annual risky levels at $1,660.1 and $1,674.1.
The Dow utility average bottomed at 616.19 on Nov. 14, then rebounded to as high as 665.93 on Dec. 14. My quarterly pivot is 640.73, with an annual pivot of 679.56 and a semiannual risky level of 732.33.
The New Year began with the S&P 500 SPDR ETF (SPY) gaining 1.6% in the first week of 2016. The "flight to safety" investments ended the first week of 2017 with the U.S. Treasury bond ETF up 1.5%, the gold ETF up 2% and the utilities ETF up 0.5%.
Here's how to trade these "flight to safety" ETFs.
Investors can trade the U.S. Treasury 30-year bond like a stock using the 20+ Year Treasury Bond ETF, which is backed by a basket of U.S. Treasury bonds with maturities of 20 years to 30 years. As a stock-type investment, it never matures, and interest income is converted to periodic dividend payments.
Here's the weekly chart for the bond ETF.
Courtesy of MetaStock Xenith
The weekly chart remains negative but oversold, with the bond ETF below its key weekly moving average of $121.25 and just above its 200-week simple moving average of $120.22, which is the "reversion to the mean." The weekly momentum reading inched higher last week to 8.65, up from 5.73 on Dec. 30, with both readings are deeply below the oversold threshold of 20.00.
Investors looking to buy the bond ETF should consider buying weakness to $115.92 and $105.77, which are key levels on technical charts until the end of June and the end of 2017, respectively. Investors looking to reduce holdings should do so on strength to $126.87, which is a key level until the end of March.