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Yesterday, the New York Fed dropped its household debt report.
The findings were pretty eye-opening - even for me, someone whose been pounding the "credit-reliant" drum a lot throughout the past couple of months.
Usually, after the winter holidays, people begin to slowly deflate their credit card balances and pay off all the gifts they purchased.
Well, this year, things are going differently. Credit has remained flat. In fact, there has been a drastic increase in debt delinquency.
Suffice it to say, this doesn't paint the rosiest of pictures of the state of the American economy.
Now, it should come as no surprise that when the consumer struggles, retailers struggle as well.
And this morning's retail sales report echoed this fear, as the increase was half of the projected 0.8%.
If you've been paying attention, I've been bearish on the SPDR S&P Retail ETF (XRT) for quite some time now. So this trouble shouldn't come as a surprise.
But the amount of smoke that's billowing from this sector - both technically and fundamentally - has me on red alert, looking for the perfect place and time to strike.
And with the number of big names set to announce earnings soon, there is some serious volatility lurking around the corner.
That's why I took some time this morning to run through everything I'm seeing in retail - and lay out my preliminary plan of attack to profit...
Of course, this is just the beginning of the activity that's to come in the retail sector.
Given the current state of the economy, I'm expecting there to be some casualties.
While I don't wish that on any business, I can only react to what the market tells me.
That said, it would be foolish to not use the data I have at my disposal to my - and your - advantage.
My Alpha Accelerators service is particularly well-positioned to capitalize on the volatility that's to come in this sector (and others).
For companies that are falling out of favor - or rising to the moment - that often means they'll fall right into the Alpha Accelerators' hands.
Here's the most recent track record, to give you an idea of how things have been going...
You'll notice some retail names - Gap, Big Lots, Funko - already populating the above list.
Well, I mean it when I say the volatility ahead only makes our prospects better.
Click here to learn more about Alpha Accelerators now.
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.
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