Wine with Bear Meat & Sectors in Bear Markets

• Posted by Greg Harmon
• on June 26th, 2011

The broad market continues to confuse and befuddle in its expanding wedge or consolidation range. Some believe a move higher is coming and others (me included – see links below) that the correction is not over. Despite that confusion the Select Sector SPDR ETF’s are all exhibiting signs of weakness, but as always there are differences to be seen. All lower, but varying shades darkness. Like the difference between fine wines for a meal. A ruby colored Tempranillo, a purple Amarone, or a black Shiraz can all be paired with a hearty meat dish, but the expert can distinguish which to choose. So which goes best with Bear meat? Depends on how you cook it.

Tempranillo

This wine is full of body but less serious in color. It should be paired with a braised Bear dinner, casual and light but pointed. Three sectors fit this set up as well, in a downtrend but trying to get out of it and exhibiting some lighter upside signs. They are the Materials Select Sector SPDR, $XLB, Industrials Select Sector SPDR, $XLI and Consumer Discretionary Select Sector SPDR, $XLY. Using the chart for XLY to illustrate, all have bounced off of previous support, here from both February

Consumer Discretionary Select Sector SPDR, $XLY

and March, but have yet to break over the accelerated downtrend that began in the beginning of June. The Relative Strength Index (RSI) is banging on the mid line at 50 but flat since it arrived there after the bounce, and the Moving Average Convergence Divergence (MACD) indicator has leveled after turning positive. A casual attempt to move higher but no intensive move. Pair this Bear meat with a 2004 Aalto Ribera Del Duero and watch for further signs of a breakdown.

Amarone

This wine is much more serious in character and a nice purple with a bit of a raisin taste and should be paired with slow roasted Bear meat. A bit more deliberate and thought out dinner. Two sectors fit this meal plan, the Financials Select Sector SPDR, $XLF and Technology Select Sector SPDR, $XLK. Using the chart for the XLK below, you can see the difference from the more casual group.

Technology Select Sector SPDR, $XLK

These sectors are back at their lows after a small bounce. their RSI never made it back to the mid line before turning lower and the MACD is fading back to zero after a tiny move to positive. These sectors are on the edge of cracking lower after roasting over the flame for a while. Pair your roasted Bear meat with a nice 1997 Giuseppe Quintarelli Amarone Della Valpolicella to savor the potential.

Shiraz

This wine is sturdy and full bodied and strong. It will go beast with fresh grilled Bear steak. And there are four sectors that remain in that raw feel of more downside mode. They are the Energy Select Sector SPDR, $XLE, Consumer Staples Select Sector SPDR, $XLP, Utilities Select Sector SPDR, $XLU, and Health Care Select Sector SPDR, $XLV, the former leaders. Three of the four are sitting in Bear flags while the XLE trends lower. Using the chart for the XLV to illustrate, not only

Health Care Select Sector SPDR, $XLV

is the RSI trending lower but the MACD never turned positive before reversing and heading lower. This group has had the shallowest correction so far outside of the XLE and the most potential to fall further. For the serious play prepare to serve your fresh killed and flame grilled Bear meat with a 2005 Kaesler Shiraz The Bogan. The XLE is being driven so much by government whims that Bear meat of this variety might be better just eaten raw at the kill site.

So how do you prefer your Bear meat? I am uncorking The Bogan to let it breathe a bit before the market opens Monday, but then again I am biased

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One More Reason to Like the Short Side of the Market

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