Group Overview:
The retail group probably could not wait to put October and end, like most of the major averages. A glimmer of hope is the action the XRT exhibits in November, as the last 4 years have CLOSED above where it started the month 75% of the time. It seems that the Santa Claus rally is being anticipated earlier and earlier each year. The ETF does remain in correction mode down 11% from most recent 52 week highs, and this week has advanced 2.6% heading into Thursday. Today it fell just short of CLOSING above its 200 day SMA dropping 1.4%, and its 50 day SMA is sloping lower since this spring. Many names in the space will be reporting numbers with tomorrow featuring HBI W SFM FND and GIL. This morning a former best of breed casual diner fell and is looking for a fifth straight weekly loss. Longs are wondering if a nasty fall can be in store, perhaps akin to the 16 of 19 week losing streak the weeks ending between 5/5-9/8/17. It is flirting with a bearish descending triangle breakdown at a 48 trigger which has a measured move to 36, as it commenced with a double top at the round 60 number.
Leaders Showing The Way Again, Until Today:
The saying goes, one will most always encounter brand new leadership in a new bull market. Of course the recent anxiety is way to short in duration to see new command emerge. But looking at some of the best in breed names within consumer space that recently demonstrated grit include BURL and PLCE. BURL romped higher my nearly 10% last week in above average weekly volume. It is still well above a double bottom breakout trigger of 166.94 taken out on 10/26, although it recorded a bearish engulfing candle, which could be construed as a double top here. Time will tell. PLCE reversed hard at the round 160 number today as well, a figure that was a long cup base trigger too in a pattern dating back to January. Bears would growl that some laggards are showing courage, which would be considered bearish, with APRN up more than 20% this week on WMT news. Surely it is from extremely depressed levels, but that frothiness should be noted.
Examples:
At the expense of sounding like a broken record, we will once again reiterate that market selloffs will often reveal the real standouts. They will show up via strong relative strength, and below is an example of just that. DIS, and how it was profiled in our 10/26 Consumer Report. Notice it quickly reclaimed its rising 50 day SMA twice in October and presently sits just 4% off most recent 52 week highs. It would be a very impressive feat, if it was to retake the bullish ascending triangle it broke above on 10/19. We know the best breakouts work right away, but if that bull trap were too be overtaken the bears will being running for cover. On its longer term chart it has the look of a long bull flag formation, that began back in late 2011, and a move above the round 120 number could really ignite this name northward.