It makes sense that retail is rolling over. Why not? Wages going up because of Amazon (AMZN) . Tariffs on goods including private label.
Has a group that was doing so well stopped performing?
It's tough to tell. I think you have to key on a stock that you aren't involved in that's less emotional than ones you don't own. For me that means looking at Macy's (M) .
I think Macy's is in the cross hairs of pretty much every single negative. It needs to pay more to keep its employees after Amazon's move. It has goods that are sourced in China that have gone up in price. Its key store is in Manhattan where tourist traffic will be cut by a strong dollar. It continues to have to spend to stay ahead of the online posse.
At the same time it yields 4.5%, it has clean inventories and is selling goods at full price given the lack of inventory in the system.
I believe that this stock will tell us what to do. It will give us the signal we need and so far it is saying "not yet, not yet."
Now there are special situations that keep going higher, namely Lululemon (LULU) , which remains the king of retail at the moment. Walmart (WMT) didn't go down yesterday despite the Amazon wage boost. But those are few and far between.
So stay close. This is a leadership group. It's ugly right now. Until Macy's stops going down it will stay ugly.
(Amazon is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN? Learn more now.)
