Gold Above A 'Golden Cross'; Commodities Rebound Continues As The Dollar Is Vulnerable

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

The Gold Shares ETF is above my semiannual value level at $120.36, with my quarterly risky level at $130.76.

The Commodities ETF is between its value level for February at $15.03 and quarterly risky level at $15.60.

The Long Dollar ETF ended last week still below my annual pivot at $25.47 and above its 200-day SMA at $25.19.

Here are the daily charts for the gold, commodities and the dollar ETFs.

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 GLD Courtesy of MetaStock Xenith

The Gold ETF ($124.50 on Feb. 1) traded to a fresh 2019 high of $125.23 on Jan. 31, well above my semiannual value level at $120.36. GLD has been above a "golden cross" that formed on Jan. 23 when the 50-day simple moving average moved above the 200-day simple moving average to indicate that higher prices will follow. My quarterly risky level is above the chart at $130.76.

GLD has a positive but overbought weekly chart with the ETF above its five-week modified moving average at $120.99 and above its 200-week simple moving average or "reversion to the mean" at $117.82. The 12x3x3 weekly slow stochastic reading ended last week at 90.48, up from 89.50 on Jan. 25, moving further above the overbought threshold of 80.00. This reading is above 90.00 as an "inflating parabolic bubble".

Investor Strategy: Buy weakness to my semiannual value level at $120.36 and reduce holdings on strength to my quarterly risky level at $130.76. My monthly and annual value levels lag at $112.98 and $110.38, respectively.

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

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

Daily Chart for GSG Courtesy of MetaStock Xenith

The Commodities ETF ($15.40 on Feb. 1) has been below a "death cross" since Nov. 29 when the 50-day SMA fell below the 200-day SMA to indicate that lower prices would follow. This warning continued to a test of its Dec. 26 low of $13.50. Dec. 26 proved to be a "key reversal" as the close of $14.27 that day was above the Dec. 24 high of $14.06. My monthly value level is $15.03, with my quarterly risky level at $15.60.

GSG has a positive weekly chart with the ETF above its five-week MMA of $15.10 and below its 200-week SMA or "reversion to the mean" at $15.95. The 12x3x3 weekly slow stochastic reading ended last week rising to 36.13, up from 28.04 on Jan. 25. The reading below 10.00 as 2018 ended and 2019 began made commodities "too cheap to ignore".

Nymex crude oil closes last week at $55.30 on strong upward momentum. My semiannual pivot is $50.84 and my monthly and quarterly risky levels are at $56.44 and $60.16, respectively.

Investor Strategy: Buy GSG on weakness to my monthly value level of $15.03 and reduce holdings on strength to my quarterly risky level at $15.60. The ETF needs to pop above the 200-week SMA at $15.95 to begin a momentum run-up.

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 UUP Courtesy of MetaStock Xenith

The Dollar ETF ($25.39 on Feb. 1) has been above a "golden cross" since May 30 when the 50-day SMA rose above the 200-day SMA to indicate that higher prices would follow. This was in play when the ETF set a 2018 high of $26.12 on Dec. 14. The 200-day SMA is $25.19 with my annual pivot at $25.47 and monthly risky level at $25.98. My semiannual risky level is above the chart at $26.39. My quarterly value level lags at $23.23.

UUP has a negative weekly chart with the ETF below its five-week MMA of $25.54, but above its 200-week SMA or "reversion to the mean" of $25.01. The 12x3x3 weekly slow stochastic reading declined to 36.31 last week, down from 39.78 on Jan. 25.

Investor Strategy: Buy weakness to my quarterly value level at $23.23 and reduce holdings on strength to my monthly and semiannual risky levels at $25.98 and $26.39, respectively, as my annual pivot at $25.47 remains a magnet.

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.