Up Coldwater Creek Without a Paddle

Not too long ago we saw a move upward with respect to retailers.
This was based on the fact that most of the bad news had been baked
into these stocks. This was shown as they reported earnings last
quarter and no matter how bad the news, most of the stocks held
their ground or moved upward. The oversold positioning of these
stocks gave them additional support at their levels and continued
to for some time.

I believe that this sector is headed downward in the short term. My
basis for this argument is easy - oil. When the numbers
were placed in these stocks last quarter, it was on the thesis that
oil was "toppy" and would not move higher. Well, oil did and many
of these stocks have not pulled back to their lows. I would stay
away from any of the high end retailers, as oil does not affect
people who buy $150 t-shirts, but it does affect the middle class
and even into the upper middle class. Basically, anyone who has
the ability to overextend themselves with homes or vehicles that they cannot afford. This keeping up with the Joneses is the area that I am
focused on.