They Sell Occam's Razors at Big Box Stores

While the weakness in the Magnificent 7 (using MAGS ETF as a gauge) is finally becoming too much to ignore today, as GOOGL and AMZN are selling off heavily to follow the ongoing META MSFT underperformance, let us not ignore the continued laggards in the housing retail big box segment. 

For a good while now we have profiled the bearish chart structures of behemoths like Home Depot and Costco, as both of those names have enjoyed multi-decade nearly relentless uptrends. Recently, though, both HD and COST have stumbled to little fanfare. After all, why pay much mind to it when we have an AI mania with the likes of MU SNDK shooting higher daily and a White House which seem hell-bent on juicing any and all minor blips in equities?

Still, it is not just HD and COST.

In fact, Lowe's is leading the group lower today, as seen on the updated LOW daily chart, below. There is also Sherwin-Williams (SHW) in the segment. But LOW is giving that bear flag breakdown look, with a fairly aggressive move lower today. We have all of these housing/retail names below their 200-day moving averages and weakening further yet. 

Recall that this segment, housing retail (with COST obviously much more of a pure retail play), is especially economically-sensitive and serves as a good proxy for the overall health of the consumer, as opposed to AI stocks. Here, there is little doubt that the market is sending a signal that 90% of the country, at least, is feeling the heat from structural inflation coupled with a dodgy labor market and mixed housing reports. 

Using Occam's Razor in this case, the explanation that requires the fewest assumptions is that the economy has already topped out amid the final (or, to use the baseball analogy, extra) innings of the AI mania.