It’s Raining Retail

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My favorite current short is XRT.  I'm not in deep, but hope to be soon.

Fundamentally, we all know the consumer is dead or
dying.  I have historically liked XRT
over RTH as I prefer not to have almost 50% of an ETF in 4 names (WMT, HD, TGT,
LOW).  In my opinion, the whole “Wal-Mart
destination” play in 08 kept RTH afloat longer than it should have been.

Retail should have been taken out behind the woodshed by
now, but for the mysteries of the market (see also QE, HFT, and who knows what else),
had actually climbed to a new high this past spring.  I made a decent chunk of change when the
rubber band had stretched that far north, covered relatively quickly, and have
been watching it ever since.  As of
today, it finished bouncing off the underside of the cloud (on declining volume):

 
XRT1
 

It appears to be breaking down:

 
XRT2
 

The MAs appear weak; with the 50 looking to be on a
collision course with the 200 soon:

 
XRT3
 

Short term hops aside, I see initial support at about $34.50
(given the timeframe, this
could
coincide with the rising 400dMA).  If
that breaks, I’ll be doubling down for the ride to the high $20s.

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