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Is It Already Too Late to Play the Holidays?

By  +Follow November 12, 2013 1:53PM
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As the holiday season gets underway, investors may be looking to play the retail space as consumers start on their shopping lists. But is has the Consumer Discretionary sector already baked in those prices? We asked Toni Turner of TrendStar Trading Group for her thoughts here.  

EQ: Last week, the market experienced a significant dip on Thursday after failing to break the all-time high, but seems to have regained its upward direction. Is this a good sign from a technical standpoint?

Turner: Yes, it did move higher on Friday after the big downdraft on Thursday. It held in a very narrow range on Monday, but of course, the bond market was closed. On the daily chart of the S&P 500, last Thursday was a pretty violent move down on increasing volume. I’ve seen those large bearish engulfing candles before in markets that are overstretched, such like this one is. While those big red engulfing candles may not mark the top, it usually indicates that the bears are waking up and coming out of their caves.

EQ: From a fundamental standpoint, the market still seems to be pretty optimistic for the intermediate-to-long-term outlook, but short term, we may be susceptible to a bit of a technical pullback here. Is that normal behavior for a market trading at these levels?

Turner: Yes, it is. Our market moves in cycles, and no price goes straight up forever, or straight down forever either. Sentiment reading show the ratios of bulls to bears topped at 3.5-to-1. That’s the Investors’ Intelligence poll, and typically when ratios get to that level, it has coincided with market pullbacks and corrections. Also, mutual funds are showing a stampede into equities funds and out of bond funds. So it looks like the retail traders are moving back into the market. To me, those are all signals to raise my stops on my long positions.

EQ: Is now a good time to start focusing closely on the retail sector and the ETFs in that space?

Turner: Interestingly enough, the Consumer Discretionary sector thrives during the period of Oct. 28 to April 20. So that’s winter to early spring, and peaks just before the equities markets top out in May. If we look at Consumer Staples, which is also retail, it usually does well from April 23 to Oct. 27. So it’s the opposite of Consumer Discretionary.

As well, a very typical retail sector trade would be to buy retail stocks on Labor Day and then sell them before Thanksgiving. However, if you look at the most popular retailers, their best growth quarter is the fourth quarter. So, I like to hold companies like Macy’s, Inc. (M) or Nordstrom, Inc. (JWN) up to their earnings reports that typically come out in January. While I hold up to those reports, em, I don’t always hold through them. I like to play the anticipation more than the reality.

EQ: So the best of breeds in this space have a bit more of a shelf life?

Turner: I find they do. It doesn’t mean it’s always smooth sailing by any stretch, however. Retailers can put out very surprising numbers, especially with same-store sales numbers issued monthly. And, there a re a lot of variables that affect retailers’ numbers, such as the price of gasoline and the weather. So for them, it’s not just about earnings. Still,  Macy’s and Nordstrom are two retailers that I definitely enjoy playing—and I enjoy shopping there too!

EQ: What are some other sectors or industry groups that look interesting to you?

Turner: Right now, I’m watching the regional banks and the SPDR S&P Regional Banking ETF ($KRE). It popped up higher on Monday, and does that many times when interest rates rise because that gives regionals banks a bit of a boost. It popped up Friday, and pulled back a bit on Monday. I also be interested in looking at the SPDR S&P Insurance ETF ($KIE). Although it’s made great gains recently, many times insurance companies stand to profit interest rates go higher.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


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Results for m
Debra Warren
31 Jul 15 16:18:17
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Wayne Rowles
31 Jul 15 16:13:41
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31 Jul 15 16:12:23
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31 Jul 15 16:09:09
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Chief Wiggum
31 Jul 15 16:04:14
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Sir Plus
31 Jul 15 16:01:12
Govt travel contract: $m at risk #cormann #15762 http://t.co/ekYuF7nAb7 #choppergate http://t.co/1d0spItrRq #auspol oㄥO #afl #nrl
Mike Deely
31 Jul 15 15:38:39
RT @hanna_hurley: Hedge Fund Manager Gives $8.5M to Eva Moskowitz Charter Chain | Diane Ravitch's blog. *Charter Darling worth $M. http://t…
Hanna Hurley
31 Jul 15 15:38:15
Hedge Fund Manager Gives $8.5M to Eva Moskowitz Charter Chain | Diane Ravitch's blog. *Charter Darling worth $M. http://t.co/JTtZuxjFx4
mektronik
31 Jul 15 15:21:21
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una wood
31 Jul 15 15:21:09
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Sir Plus
31 Jul 15 15:16:04
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FINTECHNA
31 Jul 15 15:01:27
RT Sentiquant: #sentishiftup $ZLTQ $M $VZ $NBG $AZN $KODK $FLR $SCO $NOK $CI #sentiquant #FinTech 20150731 18:00:07:321
Sentiquant
31 Jul 15 15:00:02
#sentishiftup $ZLTQ $M $VZ $NBG $AZN $KODK $FLR $SCO $NOK $CI #sentiquant #FinTech 20150731 18:00:07:321
Hanna Hurley
31 Jul 15 14:33:44
GreatSchools (@GreatSchools) | Twitter. Another CorpProfiteer chomping at our kids' data. $M profit. Parents:Beware! https://t.co/QHg83ukYaY
Stock Market Outlook
31 Jul 15 14:31:47
What Should Investors Do With The Retail Sector? http://t.co/tKThoeQYs9 $XLP $XLY $VDC $XRT $VCR $RTH $RETL $FXG $IYK $JCP $DDS $JWN $M
Seeking Alpha
31 Jul 15 14:31:47
What Should Investors Do With The Retail Sector? http://t.co/MrFWNyc71y $XLP $XLY $VDC $XRT $VCR $RTH $RETL $FXG $IYK $JCP $DDS $JWN $M
andrea thiago
31 Jul 15 14:11:49
@cintiamelli22 afull mandando $m$ chau matia$
PamphletShop
31 Jul 15 13:31:15
$SHAK Shake Shack http://t.co/UKZ3MRGmpH #Greferendum $JPM $CSX $YUM $BAC $DAL $NFLX $INTC $EBAY $GS $C $DPZ $GOOG $MA $SLB $GE $GOOGL $M
Debora Grano
31 Jul 15 13:27:18
RT @Twiteriego: Funiest memes Meek Mill wanna know drake https://t.co/64D6fi9nxB #DragMeDown #BackToBack #WannaKnow #LiesMenTell #Law4Black…
Hanna Hurley
31 Jul 15 13:24:27
@aebrennen @amandaripley *Purposeful FAILING 70% of students, exploit them, promote & maintain CorpProfiteers who siphon data 4 $M.Sham!
FINTECHNA
31 Jul 15 13:01:10
RT Sentiquant: #sentishiftup $M $ZLTQ $NBG $AZN $KODK $TRIP $BA $O $JUNO $SCO #sentiquant #FinTech 20150731 16:00:07:798
Sentiquant
31 Jul 15 13:00:03
#sentishiftup $M $ZLTQ $NBG $AZN $KODK $TRIP $BA $O $JUNO $SCO #sentiquant #FinTech 20150731 16:00:07:798
Joshua Compton
31 Jul 15 12:58:01
@Kam_Chancellor would you be willing to give up some pay for a dominant team and better legacy? What difference does a few $M make anyways?
trish
31 Jul 15 12:20:24
Tbh im not surprised at this case at all. I knew from the start sm is the one behind this. When jyj left I knew $M is just $$$
Somanath
31 Jul 15 10:47:54
1LuckyJimmy : SMH Market Vectors Semiconductor News http://t.co/EMYIynum6h $SMH $AEM $M… http://t.co/hVI2mKBfUx) http://t.co/edZtwloPFx
Market Realist
31 Jul 15 10:43:09
JCPenney's Upcoming 2Q15 Results: Should Investors Be Optimistic? $JCP $M $JWN $KSS http://t.co/2SMFSInLqG
Stock Prop
31 Jul 15 10:37:48
Some recent commentary on $M. Starboard Value's take on the bullish case for real estate portion of the stock. http://t.co/zxXnxGCl9z
Stock Prop
31 Jul 15 10:25:16
I think this is a decent entry point for $M as it has come back to around its 50 MA. The MACD isn't ideal right now but I like the stock.
twiteriego
31 Jul 15 10:22:44
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Stock Prop
31 Jul 15 10:21:44
After Smith's call at Delivering Alpha $M popped. It has now come back. I'm starting small and will add over time. New Long.
Stock Prop
31 Jul 15 10:20:09
Looking to buy $M today. Jeffrey Smith said shares are worth double their current value at Delivering Alpha. PT $125. http://t.co/MqYGfhJ296
Bruhitskayy
31 Jul 15 09:53:40
@edtertaining YOU MAKE ME $M:)E BY ALL THE FAVORITING U DO OMGG
Market Int Center
31 Jul 15 09:01:32
Macy's $M Trading Near $68.58 Support Level ( http://t.co/fYJNx3R0SZ )
Anna Ch.
31 Jul 15 09:01:02
@CBCNews haha. one off? I know someone who has a $M house yet makes $50K, how did they qualify legally with min down?😂
Zero Filter
31 Jul 15 08:59:37
Driving traffic to store any way it can $ARO gets curious bounce after repeatedly testing $1.40 ish // $XRT $M $AEO @GuyAdami @optionmonster
Zookie
31 Jul 15 08:52:58
Can we stop with this Lion thing? Fine the guy an $M and give that to conservation. @peta grow up. Much bigger things going on.
Matt Brown
31 Jul 15 08:30:21
@Macys social media team (Diane) thank you for the quick response to my issue. Problem solved. An industry leader for a reason. $M
Stocks Pastor
31 Jul 15 08:20:41
$TSLA, $GMCR, $M $HRB and $HPQ. Good stocks to watch for long opportunities.
Stocks Pastor
31 Jul 15 08:19:43
Took profit on $ETSY at near the high of the day. I mentioned yesterday $22 as the resistance level. Touched $21.90. $TSLA and $M in play
Tony Sanichara
31 Jul 15 07:31:35
We can see why our ldrs must not accept money/gifts from foreign gov/Co's. @HillaryClinton fixed an IRS prob for @UBS WHO GAVE $m's to Billy
Zero Filter
31 Jul 15 07:03:34
With neg EPS '15 & St Ests wayyy too high #Argus $UA u/g - based on #breathtaking 67x mult unrealistic St '17 EPS gets cold water / $M $NKE
Dan Chapman
31 Jul 15 06:34:27
$MANH and $M uptrending stocks back at support areas http://t.co/kliPtsgeK3 #stocks http://t.co/EeGyXBZjRj
NLCB
31 Jul 15 06:31:42
appeal $m award Trinidad Guardian I honestly hope if he wants to appeal he should pay the money into court, given the limited duration he
Jared Nickerson
31 Jul 15 06:14:07
RT @jdorsey100: A lot of Yall niggas will do anything for a $M
HOTJOSH_Hendrix
31 Jul 15 06:12:42
A lot of Yall niggas will do anything for a $M
feeohnah
31 Jul 15 06:08:11
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Kpoper123
31 Jul 15 06:03:24
@fapfapbitch Czytam właśnie do czego tym razem $M się przyczepia i płacze ze śmiechu i smutku jednocześnie... Pozwał też Luhana...
Heechulized ∞ ♡
31 Jul 15 05:56:35
WTF $M ;;;;;;;;; https://t.co/292uRGvxoD
Zero Filter
31 Jul 15 04:56:42
$UA - Soaring exp/dilution; neg EPS '15; St ests too high; 55x'17; clothes all disc stores - #Argus u/g ?? $XRT $M $NKE @optionmonster @CNBC
 IG : @DMVMayham
31 Jul 15 04:40:46
Chasing #Money 24/7 seem C.R A.Z.Y..!! Until #Friday come around. Then, itblook like you got ya head on right. Lls. #Ijs $M$
				
				
By  +Follow November 12, 2013 1:53PM
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