The Treasury Bond ETF In Trading Range, Utilities Set New High As Junk Bonds Recover

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Includes: JNK, TLT, XLU
by: Richard Suttmeier
Summary

The Treasury bond ETF is trading between its 200-day simple moving average at $118.99 and its Jan. 3 high at $123.86.

The utilities sector ETF set a new all-time high at $58.74 last week nearly testing my annual risky level at $58.98.

The high yield bond ETF remains below its “reversion to the mean”, but above its 200-day SMA at $35.34 with my quarterly pivot at $35.27.

The yield on the 30-year Treasury bond remains below its 200-day simple moving average at 3.116% last week with my semiannual pivot at 3.052% and weekly risky level at 2.955%.

The utilities stock ETF offers a dividend yield of just 2.96%, falling below 3% which makes XLU no longer attractive as a “flight to safety” investment.

The junk bond ETF is above its 200-day SMA at $35.35 and below its 200-week SMA at $36.04. This ETF has been below its 200-week simple moving average since the week of Nov. 14, 2014.

Here are the daily charts for these ETFs

The iShares 20+ Year Treasury Bond ETF (NYSEARCA:TLT)

The U.S. Treasury 20+ year bond ETF trades like a stock and is a basket of U.S. Treasury bonds with maturities of 20+ years to 30 years. As a stock-type investment, it never matures and interest income is converted to periodic dividend payments.

Daily Chart For TLT Courtesy of MetaStock Xenith

The Treasury bond ETF ($121.75 on March 15) is up 0.2% so far in 2019 after setting its 2019 high of $123.86 on Jan. 3. This ETF is up 8.8% from its 2018 low of $111.90 set on Nov. 2. TLT has a neutral weekly chart with the ETF above its five-week modified moving average of $120.86 and below its 200-week simple moving average or “reversion to the mean” at $123.86. The 12x3x3 weekly slow stochastic reading declined to 55.89 last week, down from 62.53 on March 8.

Investor Strategy: Buy weakness to my monthly value level at $116.15 and reduce holdings on strength to the 200-week SMA at $123.86. My semiannual pivot is $121.37 with my quarterly risky level is $125.62.

The Utilities Select Sector SPDR ETF (NYSEARCA:XLU)

Daily Chart For The Utilities ETF Courtesy of MetaStock Xenith

The utility stock ETF ($58.19 on March 15) is up 10% so far in 2019 and is 14.5% above its Dec. 26 low of $50.81. XLU has a positive but overbought weekly chart with the ETF above its 5-week modified moving average at $56.33 and above its 200-week simple moving average or “reversion to the mean” at $50.02. The 12x3x3 weekly slow stochastic rose to 86.94 last week, up from 82.07 on March 8 moving further above the overbought threshold of 80.00.

Investor Strategy: Investors should buy weakness my semiannual pivot at $52.38 and to the 200-week SMA at $49.95 and reduce holdings on strength to my annual risky level at $58.98. My quarterly and monthly risky pivots remain at $55.87 and $56.90, respectively.

SPDR Bloomberg Barclays High Yield Bond ETF (NYSEARCA:JNK)

Daily Chart For JNK Courtesy of MetaStock Xenith

The junk bond ETF ($35.66 on March 15) is up 6.2% so far in 2019 and is 8.3% above its Dec. 26 low of $32.92. JNK has a positive but overbought weekly chart with the ETF above its five-week modified moving average at $35.32 but still below its 200-week simple moving average or “reversion to the mean” at $36.04. The 12x3x3 weekly slow stochastic reading rose to 92.20 last week, up from 91.34 on March 8 maintaining the status of an “inflating parabolic bubble” with a reading above 90.00.

Investor Strategy: Buy weakness to my semiannual value level of $32.74 and reduce holdings on strength to the 200-week simple moving average at $36.04. My semiannual and quarterly pivots are $34.20 and $35.27, 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.