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Two Ways to Play: Return of the US Consumer?

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Strengthen your portfolio in good times and bad.

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Return of the US Consumer?

The US consumer appears to be in better shape than some think. According to the Wall Street Journal, after hibernating for much of 2009, shoppers braved fierce weather in February to make purchases at malls for spring merchandise at close to full price. Discretionary items that saw big declines last year improved as shown by teen retailer Aeropostale (ARO) and high-end chain Nordstrom (JWN). In addition, more than three-quarters of the nation's retailers that reported same-store sales yesterday for February had results better than analysts had expected. But for more on the markets, see Josh Lipton's Is This the October 1987 Sequel?

From the Bull Pen: The move may be close to done with retail apparel, but bulls might have an opportunity with Best Buy (BBY). The stock appears to have broken its downtrend and broken its base for a move higher. A sell stop can be set 2% below entry.

From the Bear Cave: If you buy into the 1987 argument, consider hedging your portfolio with a bit of Proshares Short S&P 500 (SH) or using puts on the S&P spyder trust (SPY). A sell stop on SH can be set near $50, which would equate to new highs on the S&P 500 and the losses on puts would be limited to the amount used to purchase the option.

For more ways to play and other trading ideas from more than 30 top market pros, take a free trial to our Buzz & Banter.

A Quick Check Around the World

Asian trading closed with the Nikkei 2.20%, India 0.13%, Hang Seng 1.03%, Shanghai 0.25%, and Taiwan 1.27%.

Across the pond, we see the FTSE 0.56%, CAC 0.73%, DAX 0.41%,

As of 8:20 AM EST, S&P Futures are trading +04.25 to 1126.25. Nasdaq futures are +5.255 to 1865.00.

A Look at Commodities

Over in commodities, crude oil is +0.43 to 80.64 while gold is +0.800 to 1133.90 this morning. Silver is +0.119 to 17.295 and copper +0.0285 to 3.4040.

The dollar Index is +0.0250 to 80.6100.

On the Radar

Economics

08:30 Unemployment Rate 9.8% cons.
08:30 Nonfarm Payrolls -20k cons.
08:30 Hourly Earnings 0.2% cons.
08:30 Average Workweek 33.7 cons.
03:00 Consumer Credit -$4.1B

Click here for the full trading radar.

Happy Friday! Good luck and have a great weekend!
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Position in BBY

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