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Retailers Looking Hard For The Next Positive

The retailers look suspended in mid air without any fuel left to propel them higher. Expectations have been so high for retail sales, it appears there is almost no possible way they can go much higher before a pull back.  The top pull back candidates are the high end retailers like Tiffany & Co. (NYSE:TIF), Coach, Inc. (NYSE:COH).  These have had the biggest moves higher, many up 50-100% in the last six months. If retail sales falter even a tiny bit, these could come down hard. In addition, even if retail sales perform up to par, these stocks have factored that in already. Another factor holding back high end buying by the rich is the uncertainty over taxes in the coming year. This will keep some from purchases from being made.

The markets will most likely avoid any major pull back into the end of the year. This is mostly due to the Federal Reserve and their market propping techniques. They intend to keep the markets up to get the average American spending to the maximum. The only way a major sell off happens is if Europe has another major blow up in Spain, Portugal, Belgium or Italy or the Korean peninsula goes to war.

Gareth Soloway
Chief Market Strategist
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