The Gold And Commodity ETFs Are Testing Their 'Reversion To The Mean' After The Dollar ETF Held Its

by: Richard Suttmeier
Summary

The Gold Shares ETF is testing its ‘reversion to the mean’ at $177.76 versus its 2018 low of $117.40 set on July 2.

Nymex crude oil held my annual value level of $63.81 on June 18 and set its 2018 high of $75.27 on July 3 as a consolidation begins.

The commodities ETF is nearing a test of its ‘reversion to the mean’ at $16.98.

The long dollar ETF held its ‘reversion to the mean’ at $24.82 on Monday.

Here are the daily charts and the key levels for the gold, commodities and dollar exchange-traded funds.

The gold trust ETF tracks the spot price of gold and are said to be backed by gold bars in vaults in London.

SPDR Gold Trust (NYSEARCA:GLD)

The Gold ETF ($118.93 on July 10) is down 3.8% year to date and is below a ‘death cross’ that formed on June 21. This ETF has a negative but oversold weekly chart as its 200-week simple moving average or ‘reversion to the mean’ is being tested at $117.76.

Daily Chart For GLD Courtesy of MetaStock Xenith

The daily chart for the gold ETF shows that GLD has been below a ‘death cross’ since June 21 which indicated that lower prices lie ahead. A ‘death cross’ occurs when the 50-day simple moving average falls below the 200-day simple moving average and these levels are now $121.90 and $123.49, respectively. My quarterly and semiannual value levels are below the chart at $113.60 and $103.62, respectively. The horizontal line is my monthly risky level of $125.59.

Investor Strategy: Buy weakness to the 200-week simple moving average of $117.76 then to my quarterly and semiannual value levels of $113.60 and $103.62, respectively, and reduce holdings on strength to my monthly risky level of $125.59.

The commodity ETF is heavily-weighted to energy by about 60%.

iShares S&P GSCI Commodity-Indexed Trust ETF (NYSEARCA:GSG)

The Commodities ETF ($17.75 on July 10) is up 9% year to date and is trading just above its 200-week simple moving average which is the ‘reversion to the mean’ at $16.98.

Daily Chart For GSG Courtesy of MetaStock Xenith

The daily chart for the commodity ETF shows a spike lower on Wednesday on a break below the 50-day simple moving average of $17.60. The downside is the 200-day simple moving average at $16.48 with my quarterly and annual value levels of $16.35 and $16.20, respectively. My monthly risky level is above the chart at $18.45.

The weekly chart for Nymex crude oil remains positive but after holding my annual value level of $63.81 on June 18 oil moved above my third quarter pivot of $68.14 with my risky level for June at $77.07 versus the high of $75.27 set on July 3.

Investor Strategy: Buy GSG on weakness to my quarterly and annual pivots of $16.35 and $16.20, respectively, and reduce holdings on strength my monthly risky level of $18.45.

PowerShares DB US Dollar Index Bullish ETF (NYSEARCA:UUP)

The US Dollar ETF is a basket of currencies that includes the dollar vs. Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

The Dollar ETF ($24.84 on July 10) is up 3.4% year to date and has a positive but overbought weekly chart as the ETF held its 200-week simple moving average of $84.82 on Monday.

Daily Chart For UUP Courtesy of MetaStock Xenith

The daily chart for the bullish dollar ETF shows the ticker above three horizontal lines which are my quarterly, annual and monthly value levels of $24.84, $24.18 and $23.76, respectively. Above the chart is my semiannual risky level of $28.65. The chart shows that a ‘golden cross’ was confirmed on May 31 when the 50-day simple moving average rose above the 200-day simple moving average indicating that higher prices lie ahead. These moving averages are now at $24.73 and $24.13, respectively.

Investor Strategy: Buy weakness to my quarterly, annual and monthly value levels of $24.84, $24.18 and $23.76, respectively, and reduce holdings on strength to my semiannual risky level of $28.65.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.