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Intraday Market Notes & Observations -- June 28: Retail Stocks Slide

|Includes:DLTR, FEO, LULU, MasterCard Incorporated (MA), ROST, V

2:50 pm ET: The Supreme Court's surprise ruling in favor of Obamacare didn't have as much of an impact on healthcare stocks as it did on the overall market. The major averages tanked on the open, took a respite, then came back for more drubbing. All of the major indices, save for the Dow Transports, are now testing their intraday support levels (see below).

I can't imagine the market getting a boost going into the weekend considering that we still have to deal with the outcome of the EU summit. The light volume on trading floors is reflecting a "wait and see" attitude. Market internals are weakening with both the Trin and the VIX moving into bear territory. With the SPX still in the Sell Zone (according to our propriety Buy/Sell indicator), this is no time to be buying. (I'm sorry to keep harping on the subject but this market should be entered into gingerly if at all.)

Sector Watch: Retail stocks slide
The market is a sea of red today but some sectors are faring worse than others. The rally may be over in the consumer discretionary space as consumers will be forced to reduce discretionary purchases in order to pay for mandatory healthcare coverage per Obamacare. Recent market darlings--the discount and dollar stores--are showing signs of cracking with Family Dollar (NYSE:FDO) and Dollar Tree (NASDAQ:DLTR) both gapping down 4%. Discount giant Ross stores (NASDAQ:ROST), another market darling, is off 3%.

Retail apparel stocks have been declining ever since the "sell in May" scenario kicked in. Breaking through major support levels are Lululemon (NASDAQ:LULU) and Ralph Lauren (NYSE:RL). Hitching a ride on this sinking ship are the credit card issues (since it is presumed that consumers will be making fewer purchases), most notably Visa (NYSE:V) and Mastercard (NYSE:MA) which are both off 3%.