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Two Ways To Play: Unsexy July For Abercrombie

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Strengthen your portfolio in good times and bad.

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Uninspiring Month for Retail

According to the Wall Street Journal, teen retailers suffered through a dismal performance for the month of July. Companies like Abercrombie & Fitch (ANF) and American Eagle (AEO) posted same-store sales declines of 7% and 13% respectively as the market was hurt by record energy prices as well as a 14% annual decline in teen employment amongst 16- and 17-year olds. Overall, retailers in the U.S. posted a smaller gain in same-store sales as a boost from government stimulus checks faded.

For July, retailers recorded a 2.3% gain according to data by Retail Metrics. That compares with a 4% increase in June. For more see Professor Jeff Macke's Retail Round-Up: Wal-Mart, Target Disappoint.

From the Bull Pen: Bulls can look to a different type of retail, CVS/Caremark (CVS). Entry may be set near the $35 mark should it reach that level; sell-stops can be set below that point.

From the Bear Cave: Bears can play the downside in J.C. Penney (JCP). Buy-stops can be set above the 50 DMA ($35).

Chinese Stocks Plunge

Bloomberg reports equities plunged in China hours before the Olympic Games opened after the government held back in announcing any market-supporting measures as some investors had predicted. China Cosco Holdings, (CICOF), the world's largest operator of iron-ore and coal hauling ships, dropped to the lowest levels in a year amid concerns that a slowing U.S. economy is curbing demand for products made in Asia. China's benchmark CSI 300 index plunged 4.7% to the lowest levels since March of 2007. Todd mentioned China in The Recovery and the Storm.

From the Bull Pen: Professor Udall has mentioned a play in Yingli Green Energy (YGE). YGE should succumb to weakness given the overall sentiment, but traders can fade (read:buy) the stock into $14 support. Tight sell-stops can be set below.

From the Bear Cave: The China 25 Index (FXI) is following a perfect downtrend from its October 2007 high. Bears can press the downside with buy-stops above the $45 mark.


For more ideas in real time throughout the trading day, check out Minyanville's Buzz & Banter.


Quick Check Around the World

Asian trading closed with the Hang Seng -0.99%, Nikkei +0.33%, Sensex +0.33%, Taiwan +2.63% and Shanghai -4.47%.

Over in Europe we see the CAC +0.52%, DAX +0.15%, FTSE -0.01%

As of 8:25 AM EST, S&P Futures are trading lower -1 point to 1266, and Nasdaq futures are higher by +1 point to 1887.


A Look At Commodities

Commodities are mostly lower. Crude oil is down -1.72 to 118.30. Gold is off -6.30 to 864.40. Silver is off -0.417 to 15.840, and copper is unchanged at 345.80.

The dollar index is up +0.889 to 75.430.


On the Radar

Economics

8:30 Nonfarm Productivity; 2.5% cons, 2.6% prior
8:30 Unit Labor Costs; 1.4% cons, 2.2% prior
10:00 Wholesale Inventories; 0.6% cons, 0.8% prior


Happy Friday! Good luck and have a great weekend!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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