Retail Reports Rubbish:

They say when the worst of breed names start acting well it could signal the end to something good. That is the belief, I am not necessarily a believer in it, as I am simply a servant of PRICE action. Below shows the overall weakness of the retail group compared to the S&P 500, but something caught my eye in regards to earnings reactions this week. The weaklings sprang to life, a potential frothy, bearish development. Stocks the ramped higher the last few sessions were laggards like MAT, COTY and SKX which rose 24.6, 23.7 and 18.7% for the week respectively. Surely the shorts felt the wrath of the violent, sudden bounce of the dead cat.

Comfort Zone:

The mattress space has not been relaxing one to say the least. MFRM recently filed for bankruptcy and Sealy’s, the former ZZ was bought by TPX. AMZN has muscled its way into the arena, but below is the chart of TPX. It is stalling near a double bottom buy point, but that sideways action has now morphed into a bull flag formation. On its weekly chart it just completed a 3 week tight pattern, a favorite of William O’Neill as the last 3 weeks have all CLOSED very taut within just .64 of each other. Are shareholders resting easy? It REPORTS next Thursday before the bell.

Examples:

The casual dining group has been puzzling. There has been plenty of bifurcation as CMG has solidified its best of breed status with a more than 200 handle move top to bottom in just the last seven weeks alone. Former leader MCD is lower 9 of the last 11 sessions, although it sits just 8% off most recent all time highs, the last 3 weeks have CLOSED in the lower half of the weekly range. Below is the chart of PLAY and how it was presented in our 1/25 Consumer Report. It fell nearly 8% this week, giving shareholders indigestion.

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