(Solid) Black Friday: Gangsta Sector Review

What a wild week it was for commodities. Silver and Oil took headers and dragged stocks with them. The markets gapped higher Friday but every SPDR Sector fund printed a Solid Black Candle Friday. Yes they were all up but how much ground did they give up during the day. Solid Black candles are like when your girlfriend or wife tells you, “That was good but..”. Or when you are a rising star like Nicki Minaj pushing the boundaries only to get kicked in the teeth by Lil Kim, falling past Foxy to the mat out cold before you can rise again (see below if you are over 30). So which sectors were more like Lil Kim hanging near the top and which were like Nicki getting taken down and needing to rebuild?

The Lil Kim’s

Three sectors fit into this category, Consumer Staples Select Sector SPDR,$XLP, Utilities Select Sector SPDR,$XLU and Health Care Select Sector SPDR,$XLV. What makes them like Lil Kim is that they have been steadily rising and since the March dip, hanging near the top and sometimes leading. XLV and XLU were the only sectors to finish up for the week and XLP just missed. The chart below for XLV helps explain.

Health Care Select Sector SPDR,$XLV

All three are working bull flags with XLV and XLP doing it at all time highs. Notice the volume falling off as the Relative Strength Index (RSI) is working off an overbought condition and the Moving Average Convergence Divergence (MACD) indicator is waning but still positive. And all of the Simple Moving Averages (SMA) are sloping up. This group may consolidate a bit more but looks to continue to lead, old school.

The Foxy’s

Yeah I hear you, who the heck is that? What’s it been since she was at the top, 2 years? 3 years? This category could have many names and Foxy just seemed a good fit. The female rappers that have some success and then need Jay-Z or Eminem or some other star to get some attention. Some are more recent then other and some have been in decline for a while. Five sectors are in this group the Materials Select Sector SPDR,$XLB, Financials Select Sector SPDR,$XLF, Industrials Select Sector SPDR,$XLI, Technology Select Sector SPDR,$XLK and Consumer Discretionary Select Sector SPDR,$XLY. The worst of the group is the XLF, like Queen Latifah trying to reinvent herself as a make up model, this group keeps trying to change what it is: banks, brokers exchanges, to get hot and it just does not work, as it steadily makes lower highs. The best is the XLY, like Lauryn Hill hot and strong when you notice her but not always around and then other things fill your head, XLY has been up and down over the last few months. the rest are middling along with the crowd relying on the strength of the market to determine their fate, like rappers relying on demand for the genre.

The Nicki Minaj’s

Only one sector here, the Energy Select Sector SPDR,$XLE. A strong fast rise to stardom and then bitch slapped to the ground.

Energy Select Sector SPDR,$XLE

The chart for XLE, Nicki, above shows it resting on the 100 day SMA after getting pummeled by Lil Kim this week. And it looks like it could get worse. The RSI looks lower and the MACD is growing more negative, with the Bollinger bands expanding as the SMA’s are starting to roll lower. This is the true test for the young star. Can she get up off the mat and slay it like a Gangsta again or will she become the next Foxy. Time will tell but either way it will be a Tragedy, hehe.


Keep the kids away.

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