Opportunity Highlight With The SPDR S&P 500 ETF, Retail Holders Trust, Sears Holdings Corp and Best Buy (SPY, RTH, SHLD, BBY)

The retail sector is the only industry group that reached its 2007 high in 2010. Since the retail sector’s peak on April 26th, 2010 the industry group has led the decline in the market.

On July 6th, the important retail sector bounced along with the major indexes by about 6.00 percent. The SPDR S&P 500 ETF (NYSE: SPY) bounced about 8.0 percent. Therefore, the retail sector is lagging the market a little and this should be followed closely. Remember, any economic recovery in the U.S. will require the consumer to start spending. A weaker retail sector is telling us that the expected consumer spending is contracting.

Today, the Retail Holders Trust (AMEX: RTH) is trading lower by 0.82 to $88.91. While this important ETF has bounced off the daily lows, it is still having trouble trading above its daily 20 moving average. Therefore, the overall trend is still down for the Retail Holders Trust.

Sears Holdings Corp (Nasdaq: SHLD) is another leading retailer that has really struggled since peaking in early May at over $120.00 a share. Today the stock is trading lower by 0.82 to $63.99. The recent bounce in Sears Holdings Corp has been weak compared to most of its peers in the retail sector. The stock will have some minor daily chart support around the $61.00 and $57.00 levels if it happens to break the recent lows. In any case, the stock remains weak on the charts.

Best Buy Inc (NYSE: BBY) is another leading retailer that sells technology and electronic products. Best Buy is trading lower today by 0.57 to $34.82. This is another major retailer that is still trading below its daily 20 moving average. Should this stock break below the recent lows made on July 6th at $32.81 then the next important support levels will be around $31.00 and $28.00, respectively.

The retail sector is under some pressure today after a recent short-term bounce. This is the sector that led the markets higher in early 2010. It is also the same sector that has led the markets lower since peaking in late April. Therefore, this industry group is a leading indicator and must be watched very closely. Remember this so called economic recovery is based on the U.S. consumer spending again. When the retail stocks decline this is a sign of economic contraction.

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