Don't Go Shopping With This ETF
In an economy that is sporting only tepid signs of growth and with unemployment only getting better because less jobs are being lost, investors should want no part of the retail sector. Think about it: Unless you are flush with cash, feeling particularly good about your personal economic situation or just a spend-thrift, you're probably not spending much time at the local Foot Locker (NYSE: FL) or Sears (Nasdaq: SHLD).
That much is evident with the SPDR Retail ETF (NYSE: XRT), which is down three percent year-to-date. That's actually better than the broader market, but don't be fooled. XRT is trading below its 50-day moving average and if support at $34 is violated, a very nice short entry could be had.
Last Friday, XRT saw some unusual options volume with the purchase of 6,600 March 33 puts and the sale of the same amount of March 30 puts. That strategy indicates the trader thinks XRT will stay above $30, but a short from $34 to $30 is still a nice gain.
