Commodities Led By Oil Upgraded While The Dollar Tops Out And Gold Bottoms

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Includes: GLD, GSG, UUP
by: Richard Suttmeier

Summary

The Gold Shares ETF remains below a "death cross" and below its "reversion to the mean" as a potential bottom forms.

The Commodities ETF is holding its 50-day simple moving average and is above its "reversion to the mean" on its weekly chart.

The Long Dollar ETF remains above its "reversion to the mean," but weekly momentum is now declining below the overbought threshold.

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

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

SPDR Gold Trust (NYSEARCA:GLD)

Daily Chart For The GOLD ETF

Courtesy of MetaStock Xenith

The Gold ETF ($112.93 on Sept. 5) is down 8.7% year to date and its weekly chart remains negative but oversold with the ETF below its five-week modified moving average at $115.01 and below its 200-week simple moving average or "reversion to the mean" at $117.69. The 12x3x3 weekly slow stochastic reading is projected to rise to 14.73 this week, up from 11.48 on Aug. 11, becoming less oversold below the oversold threshold of 20.00.

The daily chart shows that GLD has been below a "death cross" since June 21 when the ETF closed at $120.05. A "death cross" occurs when the 50-day simple moving average falls below the 200-day simple moving average indicating that lower prices lie ahead. This was in play at the 2018 low of $111.06 set on Aug. 15. The horizontal lines are my quarterly pivot of $113.60 and my monthly risky level of $118.08.

Investor Strategy: Buy weakness to my weekly and semiannual value levels of $110.68 and $103.62, respectively, and reduce holdings on strength to my monthly risky level of $118.08. If you do not yet have a core long position, do so versus my quarterly pivot of $113.60.

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

Nymex Crude Oil has a positive weekly chart with oil ending August at $69.80. Crude oil held my annual pivot of $63.81 during the week of June 22, then rebounded above my quarterly pivot of $68.14 as August ended. The upside in September is my monthly risky level at $75.36.

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

Daily Chart For Th Commodities ETF

Courtesy of MetaStock Xenith

The Commodities ETF ($17.36 on Sept. 5) is up 6.6% year to date with a positive weekly chart with the ETF above its five-week modified moving average of $17.24 and above its 200-week simple moving average or "reversion to the mean" at $16.52. The 12x3x3 weekly slow stochastic reading is projected to rise to 43.09 this week, up from 36.52 on Aug. 31.

The daily chart shows GSG above the 50-day and 200-day simple moving averages of $17.22 and $16.84, respectively. The horizontal lines below the market are my quarterly and annual pivots of $16.25 and $16.20, respectively. The horizontal line above the market is my monthly risky level of $18.16.

Investor Strategy: Buy GSG on weakness to my quarterly and annual pivots of $16.25 and $16.20, respectively, and reduce holdings on strength my monthly risky level of $18.16.

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.

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

Daily Chart For The Long Dollar ETF

Courtesy of MetaStock Xenith

The Dollar ETF ($25.30 on Sept. 5) is up 5.3% year to date and has a neutral weekly chart with the ETF above its five-week modified moving average of $25.15 and above its 200-week simple moving average or "reversion to the mean" of $24.92. The 12x3x3 weekly slow stochastic reading is projected to slip to 69.11 this week, down from 76.66 on Aug. 31. The stochastic reading had been above the overbought threshold of 80.00 since the week of May 11.

The daily chart shows that UUP has been above a "golden cross" since May 31 when the ETF closed at $24.76. A "golden cross" occurs when the 50-day simple moving average rises above the 200-day simple moving average and indicates that higher prices lie ahead and UUP set its 2018 high of $25.67 on Aug. 15. The 50-day and 200-day simple moving averages are now at $25.13 and $24.28, respectively. From bottom to top, the three horizontal lines are my annual value level of $24.18, my quarterly value level of $24.84, and my weekly risky level of $25.54.

Investor Strategy: Buy weakness to my quarterly and annual value levels of $24.84 and $24.18, respectively, and reduce holdings on strength to my weekly and semiannual risky levels of $25.54 and $28.65, respectively.

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.