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[3 Must-See Charts] A New Winning Streak

The stock market looked like it was ready to give back some of its hard-fought gains Thursday morning.

But the bulls were just sleeping in. Buyers showed up by early afternoon, pushing the major averages back into the green. The Dow led the way with a gain of more than 120 points by the closing bell, with the Nasdaq and S&P 500 not far behind.

Any way you slice it, investors have enjoyed a nice little bounce to begin the year.  In fact, we’re witnessing the major averages’ best start since 2006, according to MarketWatch.

The S&P 500 has now posted five straight days of gains. Since the markets reopened after the Christmas holiday, the S&P has risen in nine of the last 11 sessions. That’s an impressive comeback.

SPX

Perhaps even more impressive is how stocks have shrugged off recent headline risk. From Trump’s border wall demands and the government shutdown to concerns of a global economic slowdown, there’s no shortage of negative news impacting the markets right now.

As the stock market has proven time and again, we’re better off forgetting about these headlines and focusing on price. We’ll see how the averages react to resistance soon enough…

While the averages posted another day of gains, some brick-and-mortar retail stocks hit the skids.

As earnings season approaches, we’re getting our first look at holiday sales from the nation’s leading retailers.

The results aren’t pretty.

Macy’s, Kohl’s, and Target shares tanked yesterday morning following a barrage of disappointing sales numbers.

“The first round of results soured optimistic forecasts that this could be the best holiday in over a decade,” Bloomberg reports, citing analysts claims that post-holiday price cuts could cause even more damage to the sector in the weeks ahead.

During an otherwise uneventful day in the markets, Macy’s Inc. (NYSE:M) shares dropped nearly 18%. Kohl’s Corp. (NYSE:KSS) slipped 5%. Target Corp. (NYSE:TGT) recovered some of its losses in the afternoon, finishing the day down less than 3%.

M

When we last checked up on these stocks before the holidays, Cyber Monday hoopla wasn’t translating into a win for many big-name retail giants.

As Black Friday dies a slow death, Cyber Monday sales continue to surge. Adobe Analytics said the 2018 online shopping festivities generated $7.8 billion in sales. That’s an 18% increase over the previous year’s numbers.

Yet while old-school retailers like Macy’s tried to get in on the action by offering “cyber week” deals, Amazon remained ground zero for Cyber Monday shopping sprees. When the dust cleared, Amazon’s Cyber Monday sale generated its biggest shopping day ever, Engadget reported, beating out its Prime Day record from earlier last year.

With Amazon continuing to dominate during the holidays, it’s understandable that some pundits think it’s still “game on” for the retail apocalypse theme that dragged the sector lower for most of 2017 before many of these stocks came roaring back to life last year.

As usual, this market theme isn’t that simple. Even with the negative news that old-school department stores like Macy’s and Sears have generated recently, there are still viable opportunities in the retail space. The SPDR S&P Retail ETF (NYSE:XRT) even managed to keep its comeback alive yesterday, posting a loss of just 1.6%.

XRT

I’ll continue to monitor the retail space for potential trades as the sector digests this move.

Turning to the futures market, it looks like the major averages are finally sliding into the red.

Trump ended shutdown negotiations, which most pundits claim is a move that will lead to the president declaring a national emergency to force funds for his border wall.

The current government shutdown is now poised to become the longest in U.S. history, Bloomberg reports, with almost 800,000 federal workers missing their first paychecks as the weekend approaches.

As usual, the drama is far from over. Let’s see how steep this wall of worry can get…

Sincerely,

Greg Guenthner

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Rude Awakening PRO and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing for 13 years. In 2018, Greg’s Rude Awakening PRO portfolio beat the S&P 500 by 14%.

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