The Gold ETF Is Overbought, Commodities Stalled As The Dollar Strengthens

Here are the weekly 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 ETF (NYSEARCA:GLD)

Courtesy of Refinitiv XENITH

The gold ETF ($133.64 on July 26) is up 10.2% year to date and is 20.2% above its Aug. 15 low of $111.06. The weekly chart remains positive but overbought with the ETF above its five-week modified moving average at $130.80 and above its 200-week simple moving average or “reversion to the mean” at $119.59. The 12x3x3 weekly slow stochastic reading rose to 83.08 last week, up from 81.80 on July 19.

Investor Strategy: Buy weakness to its quarterly and semiannual value levels at $129.11 and $128.85, respectively. My monthly pivot is a magnet at $133.40.

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

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

Courtesy of Refinitiv XENITH

The commodities ETF ($15.44 on July 26) is up 10.1% year to date and up 14.4% since its Dec. 26 low of $13.50. This ETF is also in correction territory 17.9% below its Oct. 3 high of $18.81. The weekly chart is neutral with the ETF below its five-week modified moving average at $15.62 and below its 200-week simple moving average or “reversion to the mean” at $15.48. The 12x3x3 weekly slow stochastic reading rose to 49.50 last week, up from 46.93 on July 19.

Investor Strategy: Buy weakness to its monthly value level at $13.83 and reduce holdings on strength to its quarterly risky level at $18.23.

The weekly chart for Nymex crude oil ($56.20 on July 19) has a neutral weekly chart with oil below its five-week modified moving average at $57.31 and above its 200-week simple moving average or “reversion to the mean” at $53.06, as a level at which to buy on weakness. The 12x3x3 weekly stochastic reading rose to 44.08 last week, up from 43.05 on July 19.

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.

Invesco DB USD Bullish ETF (NYSEARCA:UUP)

Courtesy of Refinitiv XENITH

The dollar ETF ($26.55 on July 26) is up 4.3% year to date and up 14.8% since trading as low as $23.12 in early 2018. The weekly chart remains positive with the ETF above its five-week modified average at $26.25 and above its 200-week simple moving average or “reversion to the mean” at $25.12. The 12x3x3 weekly slow stochastic reading rose to 58.45 last week, up from 51.61 on July 19.

Investor Strategy: Buy weakness to its annual value level at $25.47 and to its 200-week SMA at $25.12. Reduce holdings on strength to its five-year high of $26.83 set during the week of Jan. 6, 2017.

How to use my value levels and risky levels:

Value levels and risky levels are based upon the last nine weekly, monthly, quarterly, semiannual and annual closes. The first set of levels was based upon the closes on Dec. 31. The original annual level remains in play. The weekly level changes each week. The monthly level was changed at the end of each month, the latest on June 28. The quarterly level was changed at the end of June. My theory is that nine years of volatility between closes are enough to assume that all possible bullish or bearish events for the stock are factored in. To capture share price volatility, investors should buy on weakness to a value level and reduce holdings on strength to a risky level. A pivot is a value level or risky level that was violated within its time horizon. Pivots act as magnets that have a high probability of being tested again before its time horizon expires.

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.