Karpel’s Corner: Retail testing new lows as Coal rejoins the bulls

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

A few weeks back, I wrote about how Retail ($XRT) was facing significant downward pressure. So, we decided to watch $84 on the sector Exchange-Traded Fund (ETF) to see how it would continue to perform.

While Retail held steady at that level over the last month, yesterday it was tested further as Amazon ($AMZN) dropped -$25 over the last two sessions. Not good at all for the $XRT, as Amazon makes up ~9 percent of it.

Should other big box names, such as Walmart ($WMT) and Home Depot ($HD), come under fire we could see further downward pressure in this sector. Should it happen, that would cast a dark cloud over the general market as a whole.

On the flip side, we’ve seen a huge pop in Coal, specifically the ETF ($KOL), which finally broke upward after a period of stubborn resistance over the last few months.

The catalyst may have been the action in China we discussed last week. Whatever the reason for Coal’s hot streak, it is a sector that, at least for now, has rejoined the bulls.

See you next time at the Corner!