ETF Analysis

The Gold ETF Sets New 2018 Low As Commodities Slip Below Its 200-Week Moving Average And The Dollar Stays Firm

Jul. 18, 2018 5:52 PM ETGLD, GSG, UUP1 Comment3 Likes

Richard Suttmeier

3.7K Followers

Summary

The Gold Shares ETF falls below its ‘reversion to the mean’ at $177.76 and set a new 2018 low of $115.83 on Wednesday.
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 continues.
The commodities ETF slipped below its ‘reversion to the mean’ at $16.91.
The long dollar ETF is above its ‘reversion to the mean’ at $24.84.

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 ($116.28 on July 17) is down 6% year to date and its weekly chart is negative but oversold with the ETF below its five-week modified moving average at $119.72 and moved below its 200-week simple moving average this week at $117.76.

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 $121.20 and $123.35, 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 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 ($16.79 on July 17) is up 3.1% year to date with a negative week chart with the ETF below its five-week modified moving average of $17.33 and slipping just below just below its 200-week simple moving average which is the ‘reversion to the mean’ at $16.91.

Courtesy of MetaStock Xenith

The daily chart for the commodity ETF shows the ticker below the 50-day simple moving average of $17.54 and trending towards its 200-day simple moving average at $16.53 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 will be downgraded to negative this week if the nearby futures contract ends this week below its five-week modified moving average of $69.87 with the 200-week simple moving average at $52.42. My annual value level of $63.81 was tested on June 18 with my third quarter pivot of $68.14 and 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 ($25.07 on July 17) is up 4.3% year to date and has a positive but overbought weekly chart with the ETF above its five-week modified moving average of $24.84 and above its 200-week simple moving average of $84.84.

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 $24.80 and $24.15, 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.

This article was written by

Richard Suttmeier

3.7K Followers

I am the Founder & CEO at Global Market Consultants, Ltd. I consider myself as a Financial Engineer with an engineering degree from Georgia Tech and a Master of Science degree from Brooklyn Poly. In 1972 I began my career in the financial services industry trading U.S. Treasury securities in the primary dealer community. I became the first long bond trader for Bache in 1978, and formed the Government Bond Department at LF Rothschild in 1981, helping establish that firm as a primary dealer in 1986. This experience gave me the insights to be an expert on monetary policy, which I feature in my newsletters, and market commentary. I formed Global Market Consultants Ltd at the end of 1988 and expanded on my analysis to include proprietary analytics. While operating Global Market Consultants I was the U.S. Treasury Strategist at Smith Barney 1991 through 1995, was Chief Financial Strategist at William R. Hough in St. Petersburg, Florida 1997 through 1999, and was Chief Market Strategist at Joseph Stevens 1999 into 2008. I began covering U.S. equities in 1997 and began to use ValuEngine as my stock screening tool in 2002 before joining them as Chief Market Strategist between September 2008 and November 2014. I was the Chief Market Strategist at Niagara International Capital Limited between December 2009 and December 2014. In 2005 through 2007 I wrote columns on RealMoney.com and authored TheStreet.com Technology Report. My unique coverage called for the housing bubble to pop in 2005 and for regional banks to collapse in 2006 and early-2007. This is when my proprietary analytics became known as value levels at which to buy on weakness and risky levels at which to sell on strength. I became an Expert Contributor for TheStreet.com in April 2012 and currently write one or two stories a day covering subjects such as: The housing market, community and regional banks, momentum stocks, earnings profiles both before companies report quarterly results and provide scorecards after reporting results. Many of my stories we include moving averages, momentum readings, analysts’ earnings estimates, and value levels and risky levels. Over the years I made frequent appearances on financial TV beginning in 1993 on CNBC covering the U.S. Treasury auctions and as a substitute for John Murphy on his segment called ‘Tech Talk’. I also occasionally appeared on CNN and Bloomberg. On almost every holiday I appeared for an hour covering stocks on a call-in / email-the-expert ‘Talking Stocks’ show on CNNfn. In 2002 I had my own show on Yahoo Finance TV called, ‘Traders’ Club with Richard Suttmeier’. When Fox Business began in late-2007 I was a frequent guest on ‘Money for Breakfast’. I also made appearances on Reuters TV, Yahoo Finance Breakout and BNN in Toronto. In recent years I shifted my focus to making presentations to various investor groups such as: MBA students at the University of Florida and South Florida, The American Association of Individual Investors, Wells Fargo Advisors, The Executive Form at the National Arts Club in NYC, Investors Roundtable of Wilmington NC, The Market Technicians Association, The Information Management Network when they cover Florida Banks in Ft Lauderdale, and the University of Tampa Investment Club. I was president of the Society for the Investigation of Recurring Events in NYC from 2000 into 2009. My background began on Long Island, New York. I graduated from Bay Shore High School in 1962, and was a member of the Honor Society, Golf Team, Math Team and Band. I graduated from Georgia Tech in Atlanta with a Bachelor of Industrial Engineering Degree in 1966, and was a member of Chi Phi Fraternity, the freshmen Golf Team, and was the captain of the Bowling team. I won the South East Regional Bowling Tournament in 1964 and won the National Intercollegiate Bowling Championship in the Doubles Event that same year. I graduated from Brooklyn Poly in 1970 with a Master of Science in Operations Research, Systems Analysis. My first job out of Georgia Tech was with Grumman Aerospace on Long Island 1966 through 1970 with project assignments on the Lunar Module and F-14 Tomcat Fighter Jet contract proposal. I was with Bank of New York in 1971, as the Senior Systems Analyst for computer applications for the Bank’s International Division. When I shifted my to Wall Street In 1972 I became a U.S. Government securities trader at Briggs Schaedle, a primary dealer where my father was Vice Chairman and my brother was Sales Manager. In 1977 I joined Loab Rhodes as a U.S. Treasury trader. Then my career advanced as noted above. I have been married to Linda since June 1969 and we are the parents of Stephen and Jason Suttmeier. Stephen has been married to Jennifer since 2004 and we have a granddaughter Emily and a grandson Robert. We have been living in Land O’ Lakes, Florida with Jason and his partner James since June 2009.

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.

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