Karpel’s Corner: Retail Readies for Sales Number, $XRT Breaks Resistance

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

The bulls showed some decent strength to start this data-filled trading week. They were led by the small caps, which finished the day up ~1 percent on the $IWM.  

A move above $114 would be a break from current market resistance, but a failure and break below $111 on the $IWM would be quite negative. There is just too much indecision in the trade into the close for us to say that the bulls remain in control. 

Yesterday, on the weekly Tradespoon Live TV broadcast, Joe Cusick of TradingBlock.com discussed the Retail Sector — specifically the estimated move price options — in the ETF $XRT. He explained that in front of today’s release of the Retail Sales number, the retail sector ETF was pricing in the potential for $XRT to move ~2 percent this week. By the way, action is a great example of the two-sided trade

Well, Retail ($XRT) finished up today in bull mode at $85.25. We would definitely like to see that continue.

If you are trading names like $KORS, $GES and $SHW, you should look closely at the estimated moves for those stocks as well as their current implied volatility ranks in front of the number. This can be helpful in setting up potential strategy adjustments. Also, check out our archived webinars, which provide tips on all these topics (and much more).

Lastly, a follow-up to my previous Miners ($XME) commentary: The clear break of $43 on the miners index has it in bull mode, and now at the level considered for new support. We need to keep an eye on that level going into the data at week’s end.

See you next time at the Corner!