Charlie Sheen is the XLE – WINNING
- Posted by Greg Harmon
- on March 5th, 2011
Three stories emerge from the weekly SPDR Sector charts and they parallel Charlie Sheen’s life. First there are the Winners, like Charlie himself of course. Then the supporting infrastructure of his Goddesses, the Porn Star girlfriends, that helped to make him what he is. And then finally the Weight of the media dragging on him, that if he can continue to control, he may drag higher with him. Let’s look at how these are playing out.
This group must by definition be small. There can be only one Charlie Sheen. It contains the original, Energy Select Sector SPDR, XLE and looking to join it is the Health Care Select Sector SPDR, XLV. The XLE has been the ‘Winner’ since this market rally began in September and continues to lead higher. Just recently the XLV is trying to join it. Below is a weekly chart of the XLV. Notice that it is now breaking higher within the uptrend and gaining strength. These two sectors are leading the way. Winning. Charlie and Drugs, probably more to say there.
Health Care Select Sector SPDR, XLV
Every winner has a support structure. Not that they need it though, due to their Tiger Blood and Adonis DNA, they just want it. Charlie has his Goddess Porn Star girlfriends and the group of Goddesses supporting the market include the Materials Select Sector SPDR, XLB, Industrials Select Sector SPDR, XLI and Technology Select Sector SPDR, XLK. They are the backbone, and in previous sector reviews I have mistakenly called them the building blocks of the market. Clearly the Goddesses is a better descriptor. Each of these weekly charts mirrors the chart of the broad market ETF’s SPY, IWM and QQQQ including the double Hanging Man for the last two weeks. Below is the chart for XLK.
Technology Select Sector SPDR, XLK
As the XLK is approaching the 100% retracement of the down move it has stalled just like the broad market. These sectors are just hanging around and moving with the market, based on the strength of the market leaders, allowing the Winners to take the spotlight and control. If the market wins they win. They are the loving Porn Star support the Winners need, holding it together. Keeping it real. Winning.
The final group I call the Weight, because they are a weight around the market like the media is a weight around Charlie. This group contains Financials Select Sector SPDR, XLF, Consumer Staples Select Sector SPDR, XLP, Utilities Select Sector SPDR, XLU and Consumer Discretionary Select Sector SPDR, XLY. The media try to latch onto Charlie and if he continues to use them well he may be able to drag them along with him higher. But if he abuses them then the media can potentially be his down fall. Like the media for Charlie, these sectors for the market have been trying to move higher with the market but are meeting resistance. If they can get through it and move higher then the entire market can benefit. Winning. But if these sectors start to roll over they can bring the high flying XLE back to earth and the market lower. Hopefully Sheen’s Korner is not an omen for what will happen. Below is the weekly chart for XLF. Note that it is bumping against the 38.2% Fibonacci retracement and having a tough time getting through. But above that level there is a lot of clear air until the 50% level at 20.28. The Simple Moving Averages are starting to move higher for these sectors so this may be the time for every group to start winning, as the media is also now enamored with Charlie. The recipe for a winning market like a winning recipe for Charlie Sheen. Winning.
Financials Select Sector SPDR, XLF
So stick with the Winners like Charlie, until they are not, and have an interest in the Goddesses, but pay special attention to the Weight as that group will likely determine the future of even the Winners. Trade’m well.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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