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XRT

XRT Retail WedgieLooks like XRT (retail ETF) is forming a wedgie with divergence. Doesn't look complete yet though, no position. Retail numbers were good last Friday but the profits aren't there and earnings sucked across the board (except LULU, lol) so there's really no compelling reason for a retail rally. AMZN and WMT are gonna bankrupt everyone else. If I was gonna invest in retail, I'd go with dollar stores. Not my thing but I drove my mom to one over the weekend, sat in the car and watched the customers walk in. All Latinos and other minorities (and the overall percentage is low in my area). That's where they're making their money, cheap immigrants who don't care about name brands. And seniors like my mom, lol. Over a mil in assets and she sill goes to dollar stores.
AMEX:XRTShort
by hungry_hippo
THE WEEK AHEAD: TAX LOSS TIME; OIH/XOP/XLE, XRT, JNKWith but a few trading days left in 2018, it's time to consider taking tax losses in non-tax deferred accounts Personally, I flattened out of virtually everything on Friday, taking my lumps here particularly in my SPY, QQQ static, defined risk core positions in this fairly atypical year-end sell-off so that I can start off 2019 fairly clean, with smaller 2018 capital gains being the small consolation prize. Nevertheless, I still have a few crap piles left that I'll continue reducing cost basis on because I don't need the losses here and/or want to hold on to them for potential use next year, as well as a couple things that have "magically" worked out in the short- to medium term that I don't want to take gains on. Along with this broad market sell-off, however, comes potential opportunities, and I've been pouring over sector exchange-traded fund charts to see where the comparatively huge weaknesses lie for potential bullish assumption plays to start off the new year. Here are a couple of preliminary ideas, the brass tacks of which I'll get into after we ring in the new year. OIH/XOP/XLE Pick your poison. With oil crashing from a high of nearly $77/barrel at the beginning of October to finish Friday at $45.42, OIH, XOP, and XLE have followed suit, with OIH hitting lows not seen since the turn of the century; XOP and XLE aren't far behind. The play: I generally favor upward call diagonals, since you can fiddle with front to back month duration, and therefore maximum per trade exposure as compared to WOF*-fing or SPACK**-ing which subjects you to full notional risk, meaning that you'll have to mentally aside the buying power for those in order to take on a full one lot of shares (13.65 for OIH, 25.35 for XOP, and 56.11 for XLE) if you're going the WOF/SPACK route. Going longer dated with the back month requires a wider diagonal spread for an ideal setup (break even at or below market price of underlying; debit paid <75% of the spread width), so you can tailor the setup to your account size and/or risk appetite for the play; personally, I don't like to go with anything shorter than split month, since I like to have plenty of opportunity to reduce cost basis, and a one-month doesn't give you that, in my opinion. You'll naturally want to compare and contrast whether going call diagonal versus naked short put gives you buying power relief on margin, particularly for something like OIH, which was trading at 13.65 as of Friday close. The buying power effect of a 13 short put, for example, should be about 20% of notional, or 2.60. In a cash secured environment, you'll generally always get relief, since the short put would invoke 13.65 in notional/buying power, and a 90/30 upward call diagonal regardless of which expiry you use for the back month is unlikely to involve something greater than a 13-wide.*** XRT Fourth quarter earnings are generally the best quarter for retail, given the amount of cash people lay out for the holiday season. XRT is at long-term range lows, so I like a bullish assumption play to take advantage of this seasonality, with the front month in fourth quarter earnings season (Jan or Feb) and the back month in the next (March or April), since earnings are likely to contract off of their holiday peaks. As with the OIH/XOP/XLE bullish assumption play, you'll want to compare and contrast a short put over the relief you'd get over doing a 90/30 diagonal, and evaluate whether the possibility of taking on full notional risk is something you want to do given your risk appetite and/or account size. * -- "WOF" -- "Wheel of Fortune" put sold at the nearest the money strike. Run to expiration, you keep the premium if it expires worthless. If assigned, you proceed to sell calls against. ** -- "SPACK" -- "Short Put/Acquire/Cover" put sold generally at the 20-30 delta. Run to expiration, you keep the preem on worthless expiry. As with the WOF trade, you proceed to sell calls against, at or above your cost basis. *** -- The OIH April 18th 30 delta short call strike is at the 16, so a 13-wide would be a back month at a 3 strike. The lowest strike available in any expiry is a 10. JNK Yes, junk. With a 5.88% yield as of Friday close (1.98/share annually; $198/one lot versus TLT's 2.85%), junk is attractive from a yield perspective and could be a decent place to park cash here while the equities markets gyrate themselves out. Nevertheless, well, it's "junk," and really the only way I want to be in it is if I can fully hedge it while sucking in the divvies. This is how the setup would work. First, price out the next monthly at-the-money/out-of-the money short call vertical. For example, the March 34/36 short call vertical is paying .33 at the mid with a delta metric of -27.16; sell it. Because it's -27 delta, you'll want to buy 27 shares of JNK, resulting in a delta neutral, fully hedged position. Naturally, you'll have to manage it as you would any other position, rolling the short call vertical down or out in time to keep the full setup (stock + short call vert) in delta balance, with the downside being that if price moves up into your short call vertical, you'll have to in all likelihood widen it out to receive a credit for it on roll. Of course, 27 shares of JNK is probably not going to rock your world with divvies, but you can scale up over time or at the gate.
AMEX:SPY
by NaughtyPines
WSJ Endorsement/JP Morgan Positive Reiteration Analysts used to gauge iPhone sales by the length of the line at Apple stores. General opinion and uninformed individuals are doing the same for RL, regarding in-store sales. Supply chain efficiencies improved significantly, YOY, revenue from online sales overseas is most robust it has ever been, and domestic transactions in America are strong online. If iPhone sales in Apple stores were still gauged this way, Apple would be one-quarter of the value it is today. Shorts about to get burned. Also, if you want to trust "top" opinions on trading view, regarding the massive short on RL by Allen Masters, be my guest. Promoting his business based in Pakistan is none of my business. He made his prediction of his short, based on the momentum of RL post-earnings. Anyone trading for 1 hour, would understand that short position, on 24-48 hour time frame. Good luck with shorting RL, and quite frankly, if you want to raise funds for your margin call when you're done, please refer to the link below: gofundme.com NYSE:RL AMEX:XRT NASDAQ:ETSY NYSE:WMT BMV:KSS NYSE:KORS NYSE:TPR NASDAQ:MTSL www.wsj.com www.wsj.com www.marketwatch.com
NYSE:RLLong
by C_moneyz
Take Away: Restaurant Spending Continue to DeclineSeptember's retail sales increased less than expected, partly due to the 1.8 percent decline in restaurant spending. This was the worst decline since 2016. Partly blamed on Hurricane Florence, that static is likely to be tuned out and the trend of mean reverting to continue after Q2-18's record $3.5B in sales - the strongest in almost 30 years. BLMN is expected to report earnings of .07 cents on October 29, but we should focus on the reality that comps are likely to disappoint following such a great second quarter. We're seeing weakening comps in strong companies like DPZ and DRI. Moreover, Bloomin' has board & mgmt issues that remain unresolved. I believe their is more of a macro play to restaurants, though. Real consumer spending has outpaced real disposable income two of the last four months, but there has been little movement in disposable income. Furthermore, food and beverage spending has followed both the trajectory of U.S. inflation and growth gains since the 2016 election. Q4-18 could be a difficult one for U.S. consumers and restaurant spending could decline in order to fund other consumption. Earnings matter, but this is a trend call.
NASDAQ:BLMNShort
by TheMacroStrategist
Stock Market Cascades Down to Oversold TerritoryAT40 = 16.7% of stocks are trading above their respective 40-day moving averages (DMAs) (a drop of 14.2 percentage points to an 8-month low and the first day of an oversold period) AT200 = 38.6% of stocks are trading above their respective 200DMAs (a drop of 7.6 percentage points to a 6-month low) VIX = 23.0 (an increase of 44.0%) Short-term Trading Call: bullish (change from neutral) Commentary Sellers dominated the trading action in a way that we have not seen in a long time… The S&P 500 (SPY) dropped 3.3%, its largest single-day loss since early February. The NASDAQ dropped 4.1%, its largest single-day loss since June 24, 2016. The volatility index, the VIX, soared 43.9%, its 11th largest gain ever. The last time the VIX gained more in a single day was the record-setting 115.6% gain on February 5, 2018. Roll out the bull, the lower prices are here and fear has finally steamrolled complacency. In my last Above the 40 post that covered Friday’s trading action, I wrote: “So while the shorter-term indicator is at levels that have frequently marked bottoms in this bull market, the longer-term indicator is not yet creating the kind of breakdowns that overwhelm bulls with bargain signs.” The indicators are flashing bargains now. AT40 (T2108), the percentage of stocks trading above their respective 40-day moving averages (DMAs), plunged sharply from 30.9% all the way to 16.7%. AT40 indicates the market is oversold (below 20%), and my favorite indicator has not been this low in 8 months. {AT40 (T2108) experienced its sharpest downdraft since the February swoon. At 16.7% AT40 went from "close to oversold" to definitively oversold!} AT200 (T2107), the percentage of stocks trading above their respective 200DMAs, plunged alongside AT40. AT200 dropped from 46.2% to 38.6%, a level unseen for 6 months. Suddenly, investors are looking at a BROAD swath of stocks that have broken down below their long-term (up)trends. {AT200 (T2107) experienced its sharpest downdraft since April. At 38.6% AT200 definitively shows a market experiencing a broad-based breakdown.} These extremes immediately give me a bias for buying. I flipped the short-term trading call from neutral to bullish. I closed out almost all my bearish positions (hedges). I started my transition to bullishness by buying put options on ProShares Ultra VIX Short-Term Futures (UVXY). The VIX’s surge is an extreme that history says cannot be sustained for long. At 20, the VIX traditionally indicates an elevated level of fear. From this point and higher, sellers exhaust themselves relatively quickly. I like starting with a volatility fade because it can still pay off even after more substantial gains from the VIX. The inevitable collapse in volatility is typically sharp enough to cause substantial losses in the long volatility products. I chose expiration dates for the end of next week to give an initial first runway to this potential action. {The volatility index, the VIX, has returned to levels last seen in the waning days of the last big market sell-off.} The major indices are all over the place with a mix of bearish breakdowns and lingering hopes for critical support to hold. This downward cascade of selling and breakdowns means that the selling can continue for another day or two before a relief rally off the oversold extremes ensues. In particular, the S&P 500 has not yet quite tested 200DMA support. The index last touched this critical long-term support in May and only closed below its 200DMA ONCE during the sell-off earlier this year. Before that episode, the index last tested support during the election related swoon in November, 2016 and last closed below the 200DMA in June, 2016. In other words, traders and investors alike should be watching the coming showdown with the 200DMA very closely. I was amazed to see the important 2800 level give way so easily, especially with the S&P 500 already so far below its lower Bollinger Band (BB). The index is extremely extended to the downside here. Ditto for the tech-laden indices and small caps. {The S&P 500 (SPY) dropped 3.3% in a path that took it all the way from 50DMA support to within less than 1% of 200DMA support.} {The NASDAQ confirmed its 50DMA breakdown with a bearish 200DMA breakdown. The NASDAQ last traded below its 200DMA in July, 2016!} {The Invesco QQQ Trust (QQQ) lost 4.4% and closed right on top of its 200DMA in a move reminiscent of its picture-perfect close on top of 50DMA support 4 trading days ago.} {The iShares Russell 2000 ETF (IWM) confirmed its bearishly precipitous slide with a 2.9% loss and 200DMA breakdown.} {The Financial Select Sector SPDR ETF (XLF) lost 2.9% in a move that confirmed 50/200DMA resistance.} {The SPDR S&P Retail ETF (XRT) lost 2.5% with a 200DMA breakdown that confirmed the end of the rally in retail stocks.} A washout of sellers is a great way to resolve oversold conditions, but such a cataclysmic end seems so regularly elusive. A gap down at the open would generate the right amount of panic to force out even the most reluctant sellers. A gap down would put the major indices at an unsustainable extreme below lower Bollinger Bands except in the case of massive successive waves of selling characteristic of a bear market. However, instead of a gap down what often happens in these cases is that the follow-on selling in international markets somehow satisfies the selling urges in the U.S.; buyers eagerly jump into the market right before the open. On the flip side, a gap UP would leave a lot of motivated sellers awaiting higher prices to unload their burdens. In any case, the 200DMA breakdowns in the major indices provide good tells of the potential limits (resistance) of the first relief rally. Per the AT40 oversold trading strategy, I will get more aggressively bullish the lower AT40 goes. Additional extreme upward changes in volatility enhance that aggressiveness. With earnings season presenting a lot of stock-specific risk, I will mainly focus on the major indices for buys. The less aggressive strategy features waiting for the first sharp pullback in volatility while AT40 is oversold or to wait until AT40 ends its oversold period. Always note that an oversold market can get more oversold and the end of one oversold period can lead to a new one. In a bull market, supports hold and oversold periods are short-lived. The February swoon started with a 1-day oversold period followed by a 4-day oversold period. Three weeks later, AT40 dropped close to the 20% level before bouncing never to return until now. I enjoyed reading and listening to many of the narratives swirling around to explain the market’s sell-off. Few, if any, are useful because they all have to do with data and information we have known for quite some time, including the Fed’s slow and steady rate hikes. The main difference now is that the market suddenly cares about the negatives and the headwinds. Most importantly, the current sell-off reminds us that poor (and shrinking) breadth during a strong run-up is a sign of underlying weakness. I saw a number of pundits claim that breadth was fine and/or that a narrow market did not matter given strong economic fundamentals and corporate earnings. The truly new catalysts will come with the stories companies tell about earnings as the season kicks off in earnest in a day or two. I have already noted two companies that sent up important warning signs: Acuity Brands (AYI) and PPG Industries (PPG). Fluor (FLR) provided more bad economic news in the after hours session.
SP:SPXLong
by drduru
winners and losers X-rayWe can see clearly in this x-ray of the major index of USA there is a clear evolution in the last 3 months, you can clearly identify two sides, One that of the winners, made up of sectors such as;; Kie ( insurers ) / ITA ( defense, aerospace ) / splrct ( tech s&p 500 ) , . and on the other , you can see the side of the losers, :: made up of sectors of :: kbe ( bank ) / xbi ( biotech ) / xrt ( retail ) / xsd ( semiconductors ) // clearly there is a separation between sectors. ¡¡ whose benefits are positive, // and other sectors whose benefits are Not positive. take note about it.
SP:S5INFT
by ManuelRodriguez
Retail Rally Comes to A Screeching HaltToys R Us refuses to die. The hedge funds that own the debt of the bankrupt toy retailer decided to cancel an auction of assets and instead plan to revive the brand and even open new retail outlets. The prospects of another Toys R Us revival could become symbolic: the timing coincided with what looks like a top in retail stocks as represented by the SPDR S&P Retail ETF (XRT). XRT fell 3.3% on high trading volume to close at a 2-month low. The move confirmed the previous day’s 50DMA breakdown. The resulting reversal of XRT’s last breakout gives the index a very toppy technical pattern. While XRT is back to the consolidation pattern that preceded the breakout, a test of 200DMA support seems highly likely given the intensity of selling. XRT last closed below its 200DMA last November. A 200DMA breakdown would confirm XRT’s top. If I were still playing my 2018 retail recovery thesis, I would have just sold everything here to lock in profits. I would next resolve to wait until holiday season headlines picked up steam for deciding next sector-wide moves. For now, I went scrambling for headlines trying to assess whether fundamental events agreed with the bearish technicals. Two other events stand out. First, Amazon (AMZN) raised its minimum wage to $15/hour and lobbied Congress to raise the national minimum wage from a paltry $7.25/hour. Wall Street hates sharing profits and wage hikes shift a small amount of the loot from shareholders to workers. Moreover, wage increases translate into cost pressures and margin compression – anathema for stock prices. Second, Stitch Fix (SFIX), an online retailer which sells customized clothing, was absolutely clobbered after its earnings report completely failed to satisfy investors hopped up on high expectations. The stock closed with a 35.2% loss that is still just a 2-month low. SFIX is a surprisingly sizable component of XRT with a 1% share. The largest holding has a 2.1% share (more on that later). I have been fascinated by the SFIX story ever since I heard the CEO tell her story. Now I am even more fascinated given the current volatility and a float which is sold 24% short. Carvana (CVNA) is the largest holding in XRT with a 2.1% share. This company sells used cars online and delivers them from multi-story vending machines. CVNA dropped 5.2% on the day and broke down below its 50DMA. This 2017 IPO is on a tear and is up 185% year-to-date. CVNA traded almost down to $8 in 2017. The stock now looks like a short, but short interest is extremely high. I took particular interest in the news events surrounding what looks like a topping pattern in the making around all-time highs: a large owner dumped a significant number of shares, an important competitor made a noteworthy financial deal (I first learned about Shift 2 1/2 years ago in an intriguing talk by the CEO Minnie Ingersoll at Stanford University’s eCorner: “A Drive to Disrupt“), and an analyst upgraded CVNA to outperform right into the teeth of the selling with no effect. A complete reversal of post-earnings gains would confirm the top. Surprisingly, Best Buy (BBY) does not show up in the top 10 holdings for XRT (cut-off at 1.4% share of assets). Still, the stock’s 4.8% drop and 50DMA breakdown confirmed the weakness in the retail sector. BBY is extremely important to watch here because a test of 200DMA support is in play. BBY last tested its 200DMA in September, 2017. BBY last closed below this support in July, 2016! Finally, I checked out one of my favorite retail plays: Nordstrom (JWN). JWN sold off with the sector to close right at 50DMA support. The price is still too high for me, but I am a buyer if it manages to return to the extended consolidation period that preceded the impressive August post-earnings breakout. Now retail has joined forces with other indices like small caps and financials to add weight to the anchor loading down the stock market. AT40 (T2108), the percentage of stocks trading above 40DMAs, dropped to a 6-month low at 37.2% even as the S&P 500 (SPY) closed flat (still near all-time highs) and the volatility index, the VIX, also closed flat. Losing retailers to a fresh sell-off like the one in 2017 would make me doubt the underlying health of the consumer and the stock market as a whole given home builders have struggled for most of 2018. Stay tuned… Be careful out there! Full disclosure: long SPY calls, long UVXY puts {Look me up at Dr. Duru on StockTwits or Twitter or my blog!}
AMEX:XRTShort
by drduru
2
KORS Breaking OutShares of KORS appear to be breaking out to the upside from a bull flag formation on the weekly chart. Previous resistance at $70 should act as support to confirm. Longer-term resistance overhead at $75, the 61.8% retracement from the all-time highs north of $100 to the subsequent lows at $33. The target from the flag is around $82-85, which would coincide nicely with the 78.6% retracement at $86 of the aforementioned high to low. Look for the breakout to be confirmed with a weekly close above $70 and a successful retest of that level before shares ramp higher.
KLong
by EchoAlphaBravo
THE WEEK AHEAD: XLU, XRT, EEM, FXI DIRECTIONALS, EWZ PREMIUMWith volatility at somewhat of an ebb here, I'm eyeing exchange-traded funds for directional plays in lieu of just hand sitting. The setup pictured here is of a XLU diagonal with the long dated option out in Dec, the front month in August. I would prefer setting this up as a skip month (Aug/Oct), but an Oct expiry isn't available yet. Here are the metrics: 5.43/contract debit, max profit on setup 1.57/contract, break even at 49.43 vs. 49.54 spot, debit paid/spread width ratio 77.6%. The debit paid/spread width ratio is a little higher than I'd ordinarily like (<75% is ideal), but it's also longer-dated, so I've got extra time to reduce cost basis if I need to. I'd look to take profit at 20% of what I put it on for (1.09) rather than going for max, which assumes a finish above the short call strike. A possible variation is to buy the Dec 44 and sell the Aug 50: 5.04 db/contract, max profit on setup .96/contract, break even at 49.04, debit paid/spread width ratio 84%. The variation lowers your break even by a half strike, thus giving you a smidge more of downside pro, but also lowers your profit potential, although you can certainly roll out any in the money short call to bring in additional credit should you want to go for greater than what the max was on setup. Other candidates for this sort of setup include: XRT (within 5% of its 52 week high; downside put diagonal), EEM (upside call diagonal; at long-term support), FXI (upside call diagonal; at long-term support). The basic setup for these is to sell the front month 30-delta strike and then buy a back month long such that your break even is slightly below where it's trading (in the case of upside call diagonals; you want the break even above spot with downside put diagonals) without paying more than 75% of the width of your spread. The one exchange traded fund that still has some juice in it is EWZ, with a background implied of around 34%. Although it's a little early to cycle into August (61 days until expiry), the Aug 17th 29/37 short strangle is paying .90/contract. Given the way it's imploded, however (it's near its 52-week low), I could also see taking a bullish directional shot here, too: the Aug/Dec 28/35 upside call diagonal costs 4.88 to put on, has a max profit of 2.12 on setup, a break even of 32.88 vs. 33.04 versus spot, and a debit paid/spread width ratio of 69.7%.
AMEX:XLU
by NaughtyPines
1
Taking a stab at JCPShares of JCP are back to their lows, setting a marginally lower low than before. Even so, I think this is a zone to buy against. The blue line represents its previous low. The lines of various shades of pink are extensions of previous swings, all of which suggest downside targets that are similar, thereby strengthening the area/levels. The green shaded box area is the "buy zone" (from $2.30-2.44). I'm a buyer for a speculative position. (Please note that this is a weekly chart, so this may take time to pan out.)
JLong
by EchoAlphaBravo
Ripple #XRPBTC - end of correction? rocket gains ahead?The Ripple XRPBTC cryptocurrency made a nice correction of three waves back to the level of the previous wave four of a lesser degree with (a) = (c) equal legs and a stroke of exactly 1.61 level (in line with previous expectations). This is really a perfect configuration in the Elliott wave theory and exactly what we are looking for in trading setups. Currently, cryptotraders must wait for confirmation of the lows, which will come with a break of the channel's resistance line (around 2.40) and make sure the price will make a break above 2.80, (impulsive up trend resumption level) which would confirm that Ripple is returning to an up trend. If Ripple goes below 1.60 for any reason, a new wave scenario will be needed.
BITSTAMP:XRPUSDLong
by sebastian.seliga.7
49
Retail ripping back higher XRTWe've seen a massive rip in retail with XRP in the last couple days. Finally breaking out of this 6 month long Head and Shoulders bottoming pattern. Breaking out over that neckine of 42 was the buy signal. Overall, retail is still in a down trend, and that downward trendline from 2015 highs is our target as well as where we should face profit taking and resistance. It is also coincidentally the 200% measured move of the head and shoulders pattern. Those technical levels always work out despite what the nay sayers may tell you. THE TRADE: Long over 42 (head and shoulders neck line) Target 45 (measured mvoe of head and shoulders) Stop under 42 We want to be buying the dips on this rip until we reach our target.
AMEX:XRTLong
by BerlinTrader591