Commodities Continue To Slump, Gold Remains Stable As The Dollar Sets A New High

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Includes: GLD, GSG, UUP
by: Richard Suttmeier
Summary

The Gold Shares ETF needs to pop above its “reversion to the Mean” at $117.56 to regain momentum.

The commodities ETF has a negative but oversold weekly chart with my annual pivot at $16.20.

The long dollar ETF traded to a fresh 2018 high of $26.04 last week and is now overbought on its weekly chart.

Here are the weekly charts 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)

Weekly Chart For GLD Courtesy of MetaStock Xenith

The Gold ETF ($115.54 on Nov. 30) is down 6.6% year to date and in correction territory 10.8% below its 2018 high of $129.51 set on Jan. 25. The weekly chart is positive with the ETF above its five-week modified moving average at $115.41 and below its 200-week simple moving average or “reversion to the mean” at $117.56 last tested during the week of Oct. 26. The 12x3x3 weekly slow stochastic reading up-ticked to 64.88 last week up from 64.62 on Nov. 23.

Investor Strategy: Buy weakness to my quarterly, monthly and semiannual value levels of $110.26, $108.62 and $103.62, respectively. A gap above the 200-week SMA at $117.55 is the key to regaining momentum. Comex gold futures is above its 200-week SMA at $1,234.6.

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

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

Weekly Chart For GSG Courtesy of MetaStock Xenith

The Commodities ETF ($15.11 on Nov. 30) is down 7.2% year to date with the ETF nearly in bear market territory down 19.7% from its Oct. 3 high of $18.81. The weekly chart for GSG remains negative but oversold with the ETF below its five-week MMA of $16.17 and below its 200-week SMA or “reversion to the mean” at $16.16, which lines up with my annual pivot of $16.20. The 12x3x3 weekly slow stochastic reading fell to 18.69 last week down from 24.30 on Nov. 23 and falling below the oversold threshold of 20.00.

Nymex crude oil is below its annual pivot of $63.81 with a weekly value level at $45.78.

Investor Strategy: Buy weakness to my weekly value level of $14.43 and reduce holdings on strength to my monthly and quarterly risky levels of $1736 and $17.73, respectively. My annual pivot remains at $16.20.

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)

Weekly Chart For UUP Courtesy of MetaStock Xenith

The Dollar ETF ($25.92 on Nov. 30) is up 7.9% year to date and set a new 2018 high of $26.04 on Nov. 28. The weekly chart is positive but overbought with the ETF above its five-week MMA of $25.67 and above its 200-week SMA or “reversion to the mean” of $25.00. The 12x3x3 weekly slow stochastic reading rose to 80.67 last week up from 79.53 on Nov. 30 above the overbought threshold of 80.00.

Investor Strategy: Buy weakness to my quarterly and annual value levels at $25.20 and $24.18, respectively, and reduce holdings on strength to my monthly and semiannual risky levels of $26.82 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.