Many investors and traders are wondering if the stock markets will see a Santa Claus rally. Often the stock markets will have an end of year rally at the start of the holiday season. This year there are some major problems that could prevent that traditional rally. The main issue that could prevent the Santa Claus rally is the European banking crisis. The European Union has not really been able to figure out how to bail out all of the banks holding European sovereign debt. This crisis in the Euro-zone is not likely going to be solved anytime soon and will keep these stock markets on edge throughout the foreseeable future.
The retail stocks have a tendency to rally after black Friday. Black Friday is the trading day after the Thanksgiving Day holiday in the United States. This is often the day that many retailers will go into the black and actually become profitable, as opposed to being in the red for most of the year, hence the term, black Friday. The Retail Holders Trust (NYSEARCA:RTH) has pulled back from its recent high of $113.85 a share. Traders can watch for some short term support around the $106.00 level on the daily chart. The RTH will have intra-day resistance around the $108.00, and $108.75 levels should it rally. Should the RTH pullback and decline today there will be intra-day support around the $106.75 level.
Some retail stocks that will usually rally after black Friday include Costco Wholesale Corp (NASDAQ:COST), Ann Inc (NYSE:ANN), Ralph Lauren Corp (NYSE:RL), and Bed Bath & Beyond Inc (NASDAQ:BBBY). Trader should remember that the retail sector will often trade together, therefore, it is always good to see the RTH showing strength on the charts when getting involved with the retail stocks. There is a major banking crisis going on at this time and Santa may have to take a back seat this year to Scrooge this year.