Will Retail Therapy Last for the Bulls?
Trades are made to be taken.
I was just asked on live TV if lower crude is responsible for the resurgence in retail. My response was "Be very careful with causal assumptions. If the airlines have a -0.26 correlation to crude over the last ten years, I would venture to guess that retail assumptions would be equally flawed.
I pulled up the chart of the RTH (retail holders) and saw that this consumer proxy is quickly approaching breakdown resistance.
While I remain constructive on the market in the near-term (above S&P 1250), it's worth noting that retail is a natural candidate for the next phase of the credit crisis. I have little doubt that this will manifest in time, the question, quite naturally, is when that time will arrive.
While I've got you--and because I can't shake the vibe that the first move is the false move (after the FOMC)--I'm gonna sneak that last leg out of the metaphorical bull costume. Again, the potential for a further liftage remains--more on this dynamic tomorrow morning--but trades are made to be taken and I'll humbly take a 400-point 24-hour gain.
May peace be with you.
Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at email@example.com.
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