Friday, May 15, 2020

#RetailStocks Review $XRT

Retail Stocks Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Retail Stocks' overall trend, revealed by trends of price, leverage, and time, are defined and discussed in the The Matrix for subscribers.

Subscriber Comments

Retail stocks, a proxy for retail sales and private consumption in the US, has been underperforming the broader stock market; the retail oscillator (LTCO) has been below 0 for months. A sustainable recovery in the stock market and economy requires retail stock leadership. Private consumption expenditures, a broad form of retail spending, account for nearly 70% of US GDP.

Retail Stocks verse S&P 500

While today's retail sales decline is shocking, it's consistent with bear phase in the retail oscillator (LTCO < 0). COVID19 might be responsible for shocking amplitude, but the bear phase started 85 weeks ago. Long before the virus showed up.

How far could retail sales fall? That depends on confidence and long term retail cycles C3 & C4. If confidence continues to falter, longer term retail cycles tell us a bigger decline is likely.

Retail Sales Cycles

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