We’ve talked about retailers in recent videos. The major point being that value retailers are not doing so well, while most higher end retailers with products that command customer loyalty are making new 52-week highs, all while the markets have been rather volatile and everyone is worried about the economy.
We could simply be in the “summer doldrums” as some describe it. Or we could be witnessing the perfect scenario of the phrase “Sell in May and Go Away.” Look at most major tech stocks or the S&P 500 and you will notice May 1st was the beginning of a rapid downtrend.
If you believe that a further decline in the overall markets is in order, you will want take a look at the S&P Retail (XRT) as good vehicle to go short or buy puts on. There is a lot of indication that the economy could worsen, taking down high end retailers whose stocks have been making those new 52-week highs, making XRT a good option to short.