What comes back to life in this market is purely random, sometimes. We catch a Best Buy (BBY) upgrade from a small retail house. We see TJX (TJX) move a bit higher. Kroger (KR) breaks out of its slump on big volume. The endless spiral in CVS (CVS) seems to have stopped.
Voila: retail rally.
Then we simply credit it with some random Fed comments that suggest a tightening might be around the corner -- or might not be.
That's neither here nor there. What matters is that if Best Buy breaks out -- $0.70 from here -- that will create a buzz about a very beaten-down group: housing-related spending. (No, I don't think it is all about Apple (AAPL) , which is an Action Alerts PLUS holding, as BBY was a big seller of the Samsung Galaxy, and that's become a bit of a zero-sum game, to say the least.)
This group, to my mind, has become ridiculously cheap, but it has been a total "who cares" situation.
For example, we know Macy's (M) is closing 100 stores. That leftover inventory is going somewhere. We've been buying TJX for Action Alerts PLUS in order to take advantage of that -- and figure we can't wait until the deed is done. So far, that's been a loser idea. Maybe it isn't anymore?
If you scrutinize this group, you could conclude that, with a handful of exceptions, like Best Buy, it's been a house of pain. Every time I suggest that Bruce Kamich chart out a retailer, I always get a hideous picture.
I think Best Buy is so visible that there can be pin action in the group.
And it won't be a moment too soon, as the bear has mauled this group for ages. Now it's almost the holidays -- and I bet the year-on-year comparisons for this group could be better than most.
I still think TJX is the best way to play it, but at the beginning of a move, it might not even matter. I first thought this retail move could happen when Gap Stores (GPS) reported a definitively strong number. But it didn't.
So watch Best Buy: $41 makes it a new ball game and, maybe, just maybe, takes the others with it.
