Tuesday, April 14, 2009

Will Retail Create Reality?

The March Retail numbers are out. And not good. Not only not good, but really bad. Analysts expected continued improvements in retail to build off of February partly due to tax refunds being at an all time high. They were wrong. 3% gain was the target number. The numbers were a 1.1% loss. That is quite a miss for an index like that.

Now, here is the kicker. Listening to the radio this morning, there was a stock analysts from UBS who said, "Perhaps the unemployment numbers are having a bigger effect than we realize". HELLO?????? REALLY??????? Shocker. Not a shocker that unemployment is having an effect. A shocker that a professional stock analyst suddenly realized that high unemployment is bad for the economy.

During this rally, you have heard the perma-optimistic media claiming that unemployment is a trailing indicator, not a leading one. That unemployment is the last thing that recovers.

I have been telling you all for awhile now that unemployment is key. Until unemployment slows down and starts going down, retail numbers will continue to go down. Real estate will continue to go down and foreclosures will continue to go up. You have to fix unemployment. Yet the professionals have been shrugging off unemployment as an important data point since credit lines are showing signs of thawing and the bank executives will all now get their huge fat bonuses again.

That's what this is all about, right? I mean, we have to give the banks trillions so they can give out billions in bonuses. Who cares about unemployment, or real estate? Well, main street cares. Wall Street doesn't give a damn. And neither does your government.

Deal with it folks. You are on the bottom of the food chain.

The retail numbers along with unemployment have got to start weighing in on the market. I know the banks are showing big earnings, but I am going to play BAC and JPM April and May puts today. Why? Because the odds are in my favor. Recent runups already price in perfect earnings. Less than 0% of shares are shorted meaning no short squeeze.

I am also going to finally take Erik's advice and play SPG puts. I still hold and I am strong on SRS but SPG has run its coarse and is primed for a slide.


  1. yesterday woulda been a better entry on spg (obviously) lol

    look at the daily chart on spg, it trends very very well too, and its a great stock and obey's t/a very well (which of course srs does not)

    when u look at the spg charts, its pretty clear where to enter, and where to take profits, imo

  2. http://stockstop.org/viewtopic.php?f=2&t=884&start=0

  3. yeah, i have been looking at it pretty close. I also have been looking at DDR and URE for puts but their prices are so low, puts are not all that worth it. SPG is a better price point but SPG is a better company than DDR and PPG both of which will go belly up soon.