Retail numbers sucked, so of course XRT went up. The market is doing exactly the opposite of what it's supposed to do, lol.
A straddle on the China deal would have netted very little, so I was right not to play it. Fact of the matter is that they still haven't resolved anything, and Dec tariffs haven't been cancelled yet.
But in any case, I wanted to show the...
The market appears to be forming a pennant, which actually makes sense since nobody really knows how the trade talks will go. No pumptarded optimism this time around, apparently the market finally learned its lesson after the last dozen talks failed.
I'm kinda doubting any news comes out until Monday, they'll probably extend talks as usual then get nothing done....
You can't predict Trump, not even Trump can predict Trump. So who knows if we get a China deal or not...
With the market stalled out for the day, I'm looking forward to next week. I expect XRT to close the gap next week and stay in the $42 waffle range. Trade talks Thu/Fri and you know Trump will Tweet something because he can't help himself. So a straddle in...
I expect this to move $1 in one direction or the other. WIsh I had remembered, I would have bought puts on an all or nothing bet. Retail is waaay overdone right now.
If the numbers are good, expect an exhaustion gap and reversal.
A seasonality play in retail at long-term range rows with a break even below mid-range ... . Markets are wide here in the after hours, so may have to do some price discovery to get a fill.
Max Profit: $181/contract
Max Loss/Buying Power Effect: $19/contract
Break Even: 43.19
Bought some weekly XRT puts for the gap fill bet. Basically an all or nothing bet on a Friday again.
I can't imagine anyone buying retail the day before the tariffs start. We'll see.
Note: Technicals are actually bullish so don't go too heavy.
I posted this last week, retail bubble may finally be over, at support right now. If it breaks support, that's a long ways down. As with everything else though, it's getting oversold on the daily.
Can you think of a retail stock other than AMZN that you would consider buying right now? I can't....
10 year retail bubble, brick and mortar stores pressured by AMZN, Wayfair finally tanking because we all know they can't make a profit, NKE profits have been declining for 3 years (yet for some reason the stock goes up anyways), UAA tanking, and now China tariffs.
Is the bubble finally over? If it is, then we're gonna see a recession next year.
I think the play for the end of the day tomorrow is a straddle on anything affected by a China deal. Who knows if it'll be good or bad, so straddle might be the best play. The cheap options candidate is retail ETF XRT, though we'll probably see more movement in chip stocks or AAPL.
Buy at the end of the day, worst case you lose one night of premium....
If this is a wedgie and today's action completes the formation then the target is a little under $41.
Of course with this pumptarded market, I'm expecting a big futures buy on close and a gap up again tomorrow before the tank on Fed dot plot.
Looks 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...
You know at this point that they want to double top the market indices, probably gonna get there by pumping retail and financials. They both have inverted H&S patterns as does small caps.
No compelling reason why retail should go up, but the market will get what it wants. Everything gets a double top, lol
Another chance to go long on XRT. Macy is just one store, everyone else reported high holiday sales. Should close this gap by Monday. Cashing out on the gap close. Short term trade (3 days or so).
XRT options have good liquidity and low premiums. Easy to trade.