24Feb10:31 amEST

Tina Shopped at Costco Quite a Bit the Last Ten Years

Although we typically think of names like the "FANG" leading stocks, plus AAPL MSFT TSLA, among others, when it comes to the "TINA" acronym (which stands for There Is No Alternative {to stocks}), Costco certainly falls under that umbrella, too. 

With a rich valuation and an abnormally-steep multi-year rally, seen below on the updated quarterly chart, COST is flashing notable relative and absolute weakness over the last several sessions. For a while now,I have favored smaller, up-and-coming loose competition like BJ or even OLLI. However, COST kept melting higher with the TINA thesis being, well, pretty much the only game in town.

But now rates are stubbornly pushing higher. And I would not be so quick to assume they are headed back down, with capital rotating over the energy/banks/materials complex. To be sure, the unwinding of the TINA trade is something which could already be happening--It's just that it will be a while before it is glaringly obvious that it is over. And only then will you see the panic truly intensify, dwarfing what we saw with ARKK yesterday morning, for example. 

Earnings are scheduled for next week, on March 4th. And I am not necessarily in the camp that the name needs to fall apart immediately. However, headed into summer I am of the opinion, especially if we see a tepid post-earnings bounce, that looking at puts towards June expiry makes sense. And if that thesis works out, rolling forward some of that action into what could be a rough September/October stretch as the new reality of higher rates unwinds TINA may be a bit more obvious at that point. 

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