• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Stock It’s Really All About the Retail Sector Now
Stock

It’s Really All About the Retail Sector Now

by September 6, 2023
by September 6, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

This entire year, retail, as measured by the ETF XRT (a.k.a. the Granny of the Economic Modern Family), has underperformed the SPY and QQQs. Encumbered by higher interest rates, higher oil prices, higher inflation, higher insurance costs, and a burgeoning credit card debt, we have wondered many times this year if Granny can keep up. Yet, each time we think Granny, or the consumer, is done, buying has come in to save that sector from becoming a longer-lasting ball and chain.

Examining the ETF, the top sector with 92.52% of the holdings is in Retail Trade. Consumer services, non-durables, and distribution services have a much smaller weight. Really interesting is that Carvana is now the top stock, holding at 3.49%, with:

Abercrombie & Fitch Co. Class A: 2.07%American Eagle Outfitters, Inc.: 1.89%Hibbett Inc.: 1.68%Boot Barn Holdings, Inc.: 1.67%Signet Jewelers Limited: 1.66%Ollie’s Bargain Outlet Holdings Inc.: 1.64%Lithia Motors, Inc.: 1.60%Kohl’s Corporation: 1.60%Gap, Inc.: 1.59%

The top 10. XRT also holds Ulta, Target, Kroger, Etsy, Nordstrom, GameStop and Walmart.

That puts the major thrust of the sector into staples with some consumer discretionary exposure. We like that, as it represents the major shopping habits of Americans, or 68% of the GDP.

One could argue that, despite the headwinds, the consumer is holding up. And one could also argue that while true, how long can really that go on?

The definition of recession is 2 quarters of declining GDP. Although we had that in the spring 2022, the US quickly came out of it by fall 2022. Currently, our GDP is 2.39.

What is great about chart reading is that we can gauge the GDP based on XRT’s performance ahead of the quarterly (and often revised) numbers the government releases. The XRT chart right now has a few key aspects based on our MarketGauge proprietary indicators.

The Phase: With the return under the 200-DMA (green) while the 50 DMA is above (blue), the phase is distribution.        Fast MA: With today’s action, XRT is holding the 10-DMA (pink).Calendar Ranges: XRT could not clear above the July 76-month calendar range high (horizontal green line). However, it is holding the July 6-month calendar range low (red line). Real Motion: XRT’s momentum is weakening after the mean reversion buy signal at the end of August. Leadership: XRT has underperformed the SPY since early August and continues to weaken against the benchmark.

Put this all together and we have some key areas holding that need to continue to hold. We also have some palpable resistance that, until it clears, means we cannot expect to see a lot of growth in the economy as measured by the consumer.

Should XRT break the July calendar range low, we will once again be talking about the 80-month moving average or the 6-/7-year business cycle low. For now, we are cautious and thinking that the damage from the rapid acceleration of rates and that that acceleration of rates did not help food or energy costs go down, so recession is still very much on the table.

For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

If you find it difficult to execute the MarketGauge strategies or would like to explore how we can do it for you, please email Ben Scheibe at Benny@MGAMLLC.com.

“I grew my money tree and so can you!” – Mish Schneider

Get your copy of Plant Your Money Tree: A Guide to Growing Your Wealth and a special bonus here.

Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

Mish explains why she’s cheerful about the markets in this August 29th appearance on Business First AM.

Mish and Chuck discuss the small caps and why they could rally from here on Money Life with Chuck Jaffe.

Mish served as guest host for the Monday, August 28 edition of StockCharts TV’s The Final Bar! Mish puts her own spin on the Market Recap, starting with the indices and then exploring sectors using her “Economic Modern Family” analysis. She then sits down with Keith Schneider for an insightful interview. Keith discusses topics such as agricultural commodities, biotechnology, and volatility.

Mish and Charles discuss a secular bear market in bonds and why gold could outshine expectations in this appearance on Fox Business’ Making Money with Charles Payne.

Mish and Paul Gruenwald discuss soft landings, recession, inflation, GDP and China on Yahoo Finance.

Mish looks at a selection of popular instruments and outlines their possible direction of travel in this appearance on CMC Markets.

Mish talks NVDA and “Trading the Weather” in these two appearances on Business First AM.

Coming Up:

September 6: Mario Nawfal, Twitter Spaces

September 7: Singapore Breakfast Radio, 89.3 FM & Wolf Financial Twitter Spaces & CNBC Asia

September 12: BNN Bloomberg & Charting Forward, StockCharts TV

September 13: Investing with IBD podcast

October 29-31: The Money Show

ETF Summary

S&P 500 (SPY): 440 support 458 resistanceRussell 2000 (IWM): 185 pivotal 190 has to clearDow (DIA): 347 now pivotal supportNasdaq (QQQ): 363 support and over 375 looks goodRegional Banks (KRE): Needs to hold 44 to be convincingSemiconductors (SMH): 150-161 range to watchTransportation (IYT): 252 biggest overhead resistanceBiotechnology (IBB): Compression between 124-130Retail (XRT): 62.90-key support to hold

Mish Schneider

MarketGauge.com

Director of Trading Research and Education

You Might Also Like
  • Trading the Swing within the Pattern: IGV Example
  • Top Ten Charts for August: Two Bearish Turnaround Plays
  • Is This The Magic Upward Break Everybody Was Waiting For?
  • MEM TV: Leadership Emerges in a Flat Market
Share
0
FacebookTwitterPinterestWhatsapp

previous post
U.S. economy added 187,000 jobs in August, more than was expected
next post
Small-Caps Take BIG Plunge in Risk-Off Move

You may also like

Forex Secrets: How to Profit When EUR/USD Goes Nowhere

October 23, 2024

Sector Rotation is Giving Conflicting Stories!

October 16, 2024

The Ord Oracle May 9, 2023

May 10, 2023

The Key to the August Breakouts

September 6, 2023

Week Ahead: NIFTY Violates Key Support Levels; Drags Resistance Lower

October 26, 2024

When You See Amazon Turning Around Beautiful Things Start To...

March 31, 2023

Prepare NOW For A Potentially Huge Storm Ahead

June 16, 2024

DraftKings’ Stock Overheating? Here’s What You Need to Do Now

February 16, 2024

Going, Going, Gone: End of Week Themes with GoNoGo Charts

January 21, 2023

Downside Risk in a Bullish Market

March 19, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right Now

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025
    • U.S. foreign tax bill sends jitters across Wall Street

      May 30, 2025
    • Amazon taps Xbox co-founder to lead new team developing ‘breakthrough’ consumer products

      May 30, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,765 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,472 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,451 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,432 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,308 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Breakouts, Momentum & Moving Averages: 10 Must-See Stock Charts Right...

      May 31, 2025
    • Leadership Rotation Could Confirm Corrective Phase

      May 30, 2025
    • Run Your Stock Portfolio Like a Pro Sports Team

      May 30, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,106)
    • Investing (538)
    • Stock (2,581)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Tech Stocks Plunge: What This Means...

    November 16, 2024

    Week Ahead: Markets Approaches Union Budget...

    January 28, 2023

    A Foray into Currency Pairs

    June 15, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here