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What to Expect From Retailers Next Week

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Probably better-than-expected numbers and a lousy reaction from the market.

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Greetings from New York, where the snow is picturesque and the trading is bearish. I'm getting long the Ultrashort S&P500 ETF (SDS), again, with the S&P 500 failing to take out 1105. Why 1105? Because I counted the Big Round Number as resistance but I gave it five points of latitude. Since I came into the day with a bearish bias but long, I went to add short exposure at resistance. That gives you a nice tight stop on the upside (1115, which is 1110 plus five and would mark a breakout of sorts) and a downside target that remains around 1050.

I'm not looking to catch 100% of a move; I'm looking to capture 80% of it by tip-toeing through the traffic with short-term trades, tight stops, and discipline. This type of trading is grinding, not playing for the big hand. Take a slice of winners and be quick to step aside if you're wrong. Until further notice, the market is grinding up time and money somewhere around here at Dow 10k and S&P 1100. That said, there's more room below than above so I'm trading short to flat on exposure. Get it?

Here's what I'm awkwardly segueing into for the benefit of anyone left after the above:

  • We get retailers starting next week. What do I expect? Better-than-expected numbers and a lousy reaction from the market.

  • J. Crew (JCG) will beat where it guided to, Nordstrom (JWN) will be solid, and Target (TGT) will beat. That is, if you wanted specific names and opinions along with your idle abstractions.

  • Minyan "Knock Nock" emails me that Steak n Shake (SNS) last Friday beat earnings and announced that its corporate name would henceforth be... Biglari Holdings. "Big". "Larry". "Holdings"?!!!!. Are any of you prepared to let Big Larry know this idea is dog food or is it up to my column? Too late!

  • Isn't it time for Cup o' Noodles if Steak n Shake is too far a drive?
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Positions in JWN, JCG, SDS

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