Bitchin’ Rock Star from Mars Gets Punk’d, and Tiger Woods

• Posted by Greg Harmon
• on May 14th, 2011

The big news this past week of course was Ashton Kutcher replacing Charlie Sheen on Two and a Half Men. This totally makes sense because once the Warlock said that he was a “total bitchin rock star from Mars” the producers at Punk’d, Ashton Kutcher’s MTV show, took notice. They only Punk rock stars you know. Once on his radar it was only a matter of time before the seeming youngster took over. This episode also relates to the action in the SPDR sector funds, the Ashton Kutcher’s vs. the Charlie Sheen’s, in so many ways. Two months ago I wrote that Charlie Sheen is the Energy Select Sector SPDR,$XLE (link below), but it only now dawns on me how accurate that was. Let me explain this whole mess.

The Ashton Kutcher’s

The first thing that comes to mind when you mention his name is his 50 something year old (I think, but I’m not really sure, she may be older) wife Demi Moore. That combined with the Punk’d thing tells a lot about this group of sectors. Like Ashton you get lulled into thinking they are exciting but then realize a 20 year old guy (he may be 22, I did not check any facts) married to a 60 year old women can’t really be that exciting. This group of sectors includes Consumer Staples Select Sector SPDR,$XLP, Utilities Select Sector SPDR,$XLU and Health Care Select Sector SPDR,$XLV. Staples, Health Care and Utilities, wake up Demi and pour me a strawberry wine spritzer, lets PARTY! These are your more recent market leaders though, like Ashton is now taking over at the top of the show. Using the chart of the XLV to illustrate they have all been rising quickly over the past month.

Health Care Select Sector SPDR,$XLV

But you can see that what looked like strength initially may be losing some energy. The Relative Strength Index (RSI) has been elevated above the technically overbought 70 line for a few weeks and is leveling, not rising. The volume for the move higher last week was a bit lighter, and the Moving Average Convergence Divergence (MACD) indicator is waning. Still bullish and can go on for a while but a sign that the initial surge of energy is weakening nonetheless. They will likely continue to lead for the coming week and maybe beyond, maybe until we get to see Ashton on the show.

The Charlie Sheen’s

So much to say here but it boils down to this. Hookers are no longer in. If Charlie getting dumped and then replaced was not enough evidence of that for you then look to the PGA Tour. Tiger Woods pulled out of the TPC at Sawgrass this week only able to score nine holes on his card and there were no jokes flying around the internet! But the connection between Mars, Charlie Sheen and the XLE is incredible. Many geologists believe that the materials that we mine from the Earth today came from outer space and most think Mars (I made that up). Of course it was these impacts with our planet that killed all the dinosaurs so we could have oil to drive everywhere. This group of sectors fits this description perfectly. It contains the Materials Select Sector SPDR,$XLB, Charlie Sheen himself (see below), Financials Select Sector SPDR,$XLF and Industrials Select Sector SPDR,$XLI. Materials, Energy and Industrials are all tied to our history with Mars and of course since bankers are all men and Men are from Mars, Financials get tossed in. With Charlie Sheen (see below) leading the way they are all heading from an island paradise to some crack den in the Bronx. Using the chart of Charlie Sheen (see below) to illustrate this group has been

Energy Select Sector SPDR,$XLE

stair stepping lower and looks to continue with volume increasing for each down move relative to the previous partial retrace higher. All are through their 20, 50 and 100 day Simple Moving Averages (SMA’s) except for the XLI which has only lost the 20 day SMA so far. Those SMA’s are starting to roll lower and the RSI and MACD point for more downside. Look for continued downside until Charlie is found lying naked in the street mumbling WINNING.

The Other Guy

I almost forgot. There was actually another guy on the show with Charlie and he will continue with Ashton. I started to look for his name but then realized it did not matter and if I printed it everyone reading would pause and think “Who?” But this aptly describes the remaining sectors Technology Select Sector SPDR,$XLK and Consumer Discretionary Select Sector SPDR,$XLY. Like the Other Guy, these sectors have been sitting back watching what has been happening, just moving sideways. As the world changes around them the consolidation is getting a bit long in the tooth and they are starting to show signs of a top. Look at the chart for XLK below.

Technology Select Sector SPDR,$XLK

What was a nice tight bull flag is now expanding and dragging on as the RSI starts to head lower and the MACD crosses negative. There are lots of SMA’s underneath and other support areas so it would take a major push to send them into the gutter with Charlie. Does a clash with Ashton have the potential to do that? Perhaps. Lack of chemistry with a new star has led to the replacement of no name extra’s in the past. Or it just might flop entirely. Keep an eye on these if the approach the 50 day SMA.

I hope that makes it clearer where my thoughts are on the entertainment world and SPDR Sector funds.

Charlie Sheen is the XLE – WINNING

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