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Is It Already Too Late to Play the Holidays?

By  +Follow November 12, 2013 1:53PM
Tickers Mentioned:

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
Christopher Tkaczyk
27 Nov 15 20:59:25
RT @philwahba: ICYMI- he's pretty sleep deprived right about now $m https://t.co/KTHK2Fiyqn
27 Nov 15 20:57:06
got another one. $M
TalkMarkets Recap
27 Nov 15 20:39:02
Black Friday Trading: How Retail Stocks are Performing $BBY $M $TGT $WMT $AMZN $ADBE https://t.co/ia280CKVc5
Open Outcrier
27 Nov 15 20:06:25
Black Friday crowds thin in subdued start to U.S. holiday shopping https://t.co/JluuVue8Ef $BBY $M $TGT $WMT
Tom Hayden
27 Nov 15 19:35:06
WBBM reported that $M down on news about winter apparel - unlikely if you check out the options activity.
Kay GB
27 Nov 15 19:26:04
Super String Theory of $M theory: We and multiple Mothers optimistic memes and membranes without oppression.
Arun Dev
27 Nov 15 18:58:20
RT @BrianSozzi: Macy's CEO did tell me today home stuff started to do well again $M #BlackFriday https://t.co/EF1115U4td
27 Nov 15 18:05:50
Shopping bag check $M highest. $JWN , Bloomingdale 2nd 3rd at my local mall. $RTH $XRT. how about ur local #mall?
Jane MacIntire
27 Nov 15 17:49:56
RT @1223Chuck: @DCTFTW @sunlorrie @Real_Metis @CBC Exactly let's talk about the $M + the NDP owe & won't pay back
J. Chuck Ibey
27 Nov 15 17:34:55
@DCTFTW @sunlorrie @Real_Metis @CBC Exactly let's talk about the $M + the NDP owe & won't pay back
TalkMarkets Recap
27 Nov 15 16:39:01
Black Friday And Stormy Chinese Markets $BBY $M $AMZN https://t.co/N990esHiW1
Alejo Brizuela
27 Nov 15 16:11:13
@Fanalepra $m$
TalkMarkets Recap
27 Nov 15 16:09:02
U.S. Shoppers Go Wild, Beat Each Other Up To Celebrate Black Friday Sales $M $WMT https://t.co/c5lVKpw6Ck
27 Nov 15 15:43:10
Unusual option activity alert: $EWT 5x average daily volume, $DIS 4x, $VRX 4x, $GPS 4x, $M 4x, $RSX 3x, $HYG 2x
27 Nov 15 15:39:11
FL Foot Locker, Inc. Chart https://t.co/z99paanjSp $FL $M $JBLU $FDN #FL #pennystocks #tradeideas
27 Nov 15 15:38:37
@JustinTrudeau @HannahThibedeau It is nice to hear about the $M we R giving to Climate Change & $M to refugees. However we, have suffering
TheStreet Consumer
27 Nov 15 14:20:03
Macy’s CEO Talks Goals and T-Day Initiatives $M https://t.co/3kS9Q5eN5O
27 Nov 15 14:12:03
$M: Macy’s CEO Talks Goals and T-Day Initiatives: https://t.co/N3HwL6Jxy4
Options Answers
27 Nov 15 13:55:05
RT @PolgarStocks: HOD.TO Horizons BetaPro NYMEX Crude Oil Bull Plus ETF Company Info https://t.co/a8UoKlsZHR $HOD.TO $M $SMH $SSO #HOD.TO …
27 Nov 15 13:43:52
#BlackFriday Trading: How #Retail Stocks are Performing $BBY $M $TGT $WMT $AMZN $ADBE https://t.co/sJZAYs9BQi
Stock Forums
27 Nov 15 13:41:04
JBLU Direxion Daily Junior Gold Miners Index Bear 3X Shares Message Board Posts https://t.co/nxOO2kIUl5 $JBLU $HOU.TO $KBIO $M #JBLU…
27 Nov 15 13:40:03
HPQ HydroPhi Technologies Group, Inc. Summary https://t.co/WCHxM1JxwN $HPQ $NVDA $M $HOD.TO #HPQ #stockmarket #stockmarket
27 Nov 15 13:39:32
HOD.TO Horizons BetaPro NYMEX Crude Oil Bull Plus ETF Company Info https://t.co/a8UoKlsZHR $HOD.TO $M $SMH $SSO #HOD.TO #stocks #stocks
Brian Sozzi
27 Nov 15 13:36:33
Macy's CEO did tell me today home stuff started to do well again $M #BlackFriday https://t.co/EF1115U4td
Leah Duncan
27 Nov 15 13:29:21
Black Friday crowds thin in subdued start to U.S. holiday shopping: https://t.co/NBiIWhzefE via @Reuters #BlackFriday #retail $M $BBY $TGT
CM Derivados
27 Nov 15 13:09:16
Les compartimos el Trade de la semana en $M una vertical alcista. #CMD #TRMX @BolsaMx @Finanzabolsillo https://t.co/6ClfVO9yNQ
Mike H
27 Nov 15 12:58:20
Day Trading Chatroom for FREE! Access Here: https://t.co/SuZqfYcyNa $DISH $WWAV $NAT $RX $BBBY $BCRX $NTAP $XLU $SPLS $M $AAPL $FB $TWTR $X
27 Nov 15 12:40:10
On the 5th everyday and you say $M$ don't trap everyday. #stophatin
David B Kim
27 Nov 15 12:36:27
@BelleCollection #Seattle top 3 bags seen by shoppers 3. $ARO 60% all you can fill 2. @UniqloUSA 1. $M #BlackFriday #trading
Brent Adamson
27 Nov 15 12:35:03
Department store comps with $DDS https://t.co/Xfa3aZoMBt $M $JWN
Marketing Dive
27 Nov 15 12:30:05
.@Macys CEO: Shoppers will have a 'field day' with promotions this year: https://t.co/UfYMGukHWb $M
Phil Wahba
27 Nov 15 12:27:15
ICYMI- he's pretty sleep deprived right about now $m https://t.co/KTHK2Fiyqn
Tom Hayden
27 Nov 15 12:26:37
Max pain for $M is 40 bucks, closed at 39.99 - lol https://t.co/WDsmceDXQT
Susan Schulte
27 Nov 15 12:22:31
RT @Michael_MBA: Macy's CEO on how Black Friday is going so far. via @FortuneMagazine https://t.co/Hruho6ClX9 by @philwahba $M #retail #mal…
James DiPlata
27 Nov 15 12:16:03
RT @bosocial: RT hetmentale: #BlackFriday activity: $AAPL, $TGT, $WMT, $AMZN, $DIS, $M, $SHLD #optionstrading https://t.co/g2qiIuHcOg
27 Nov 15 12:08:23
$TJX $M $JWN $TGT $AAPL $WMT: Black Friday Action Muted as Shoppers Spent Online: https://t.co/AoWQ8rzdc5 https://t.co/g2qiIuHcOg
27 Nov 15 12:07:06
$TJX $M $JWN $TGT $AAPL $WMT: Black Friday Action Muted as Shoppers Spent Online: https://t.co/qaqZhqdZtJ
27 Nov 15 12:06:35
Macy's CEO on how Black Friday is going so far. via @FortuneMagazine https://t.co/Hruho6ClX9 by @philwahba $M #retail #malls
27 Nov 15 11:50:03
WEF.TO Western Forest Products Inc. 52Wk Low https://t.co/D1GN2CYu7O $WEF.TO $PRW.TO $WMIH $M #WEF.TO #invest #investing
27 Nov 15 11:48:34
UBIO ProShares UltraPro Nasdaq Biotechnology ETF Yield https://t.co/FnaUNHrlXQ $UBIO $HQD.TO $M $SPHS #UBIO #investing #share
27 Nov 15 11:34:03
BHP BHP Billiton Ltd. Last Price https://t.co/4TzsZ9DYza $BHP $UNP $M $HD #BHP #nasdaq #investing
Rosner Stocks
27 Nov 15 11:33:13
APPF AppFolio, Inc. Stock Message Board https://t.co/ezqxEFzgeA $APPF $GPRO $BMRN $M #APPF #invest #invest
27 Nov 15 11:17:40
RT hetmentale: #BlackFriday activity: $AAPL, $TGT, $WMT, $AMZN, $DIS, $M, $SHLD #optionstrading https://t.co/g2qiIuHcOg
James DiPlata
27 Nov 15 11:15:29
RT @hetmentale: #BlackFriday activity: $AAPL, $TGT, $WMT, $AMZN, $DIS, $M, $SHLD #optionstrading
27 Nov 15 11:11:59
@realDonaldTrump @CzarofFreedom @Macys $M
27 Nov 15 11:04:33
$spy $ flow Divergence : $M;Services ;uptick/downtick 1.39; price % change -0.97% ;$ flow 9.66 M https://t.co/ngBWy4ERbg
27 Nov 15 11:03:07
Co’s that have issued #earnings #guidance in the last 30 days https://t.co/pHPKQRSYln $DCI $CPB $GME $HIBB $SJM $TGT $WMT $JD $TYC $BUFF $M
Breaking News
27 Nov 15 11:01:12
$M: Earnings of $2.55 Expected for Macy’s Inc (NYSE:M): https://t.co/6dWcq0CRje
Meanwhile At Walmart
27 Nov 15 10:58:14
RT @BrianSozzi: Here is what Macy's CEO had to say about its Black Friday start: https://t.co/NLR3fMfexx $M $JCP
27 Nov 15 10:57:11
$HAS $VNO $KKR $AMZN $M: Toys ‘R’ Us CEO Says Early Signs Point to Slower Growth for Toys: https://t.co/QVv61xb5EA
By  +Follow November 12, 2013 1:53PM



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