Flocking Together Into Darkness

On the back of earnings disasters by Macy's and Fossil, down 11% and 30%, respectively, as I write this, retail names visually across the board are getting pounded this morning. Note that this includes names which has been holding up well, such as Coach. Other issues like KORS TGT TIF are not being spared either, getting clubbed without mercy. 

Adding insult to injury to the consumer-is-strong thesis is Disney down a cool 4% after earnings and still in danger of topping after a very steep multi-year rally. 

The counterpoint to the bear consumer thesis here, however, is that AMZN continues to push to new highs, either singlehandedly crushing the retailers or at least oblivious to their struggles. 

Regarding retail as a whole, though, the XRT sector ETF daily chart, below, illustrates their underperformance for quarters on end before a sharp rally commenced in February. 

The rally appeared to be so strong so as to convinced many that retail had bottomed for good. But all that really happened was a rather mechanical test of a declining 200-day moving average. 

And this recent weakness away from $45 and the highlighted head and shoulders top (light blue lines) we have been tracking for Members on a daily basis would seem to add credence to the idea that retail may have a date with its prior 2016 this summer.