PRE MARKET

One of the most important things we can do here as well as on the radio show…is to tell you what to avoid. When we tell you what to avoid, it is for a good reason. Price is not keeping up with the market. Price is starting a downtrend. Price is in a downtrend. Price breaks support. Price breaks longer term support. Price goes into a steep downtrend. Price stays in that bearish downtrend. Of course, we also add in the why. For many moons, we have been telling you to avoid just about everything RETAIL. RETAIL broke down, headed down, broke shorter term support, longer term support and then got real bad. It was not just any RETAIL. It was MOST ALL RETAIL.

Today…again…AAP is gapping down from $109 to $93. We turned negative on AUTO PARTS RETAIL a long time ago.

DKS is gapping down from over $35 to $28. That top occurred in the high 50s. Whether it is M, KSS, TGT, DLTR, DG, COST, GPS, FL, BBBY, LB and dozens of others, pay attention to price. These are all famous names. All past favorites that are now toast. The world is chaning. We are reading every day about slowing comps, more stores being shut and everything that goes along with things heading south. Pay attention.

Futures up a bit. Looks like maybe, possibly last week was just the North Korea thing…but remember, regardless, this is now around a 50-50 market where half the market ain’t happening. The good 50% better keep working.

COH,…one of the few better acting RETAIL-types gapping down about 8%. Sales down 2%.

Other thoughts:

As we predicted, North Korea blinks. As soon as China threatened them with cutting them off, they had no choice.

Other earnings this week: TGT, CSCO, LB, NTAP, WMT, AMAT, GPS, ROST, CRM, FR, EL, FL.

Rates up decently today which means FINANCIALS will be up. Whenever rates on the long end back up, financials move up because of the expected margin expansion. REGIONALS do not act well. The big guys are range-bound.

SEMICONDUCTORS (SOX) are back above the 50 day. This is important and needs to hold. Notice how market has been following this group almost to a tee.