NEW BEARISH Plays

SPDR S&P Retail ETF - XRT - close: 43.20 change: -0.41 stop: 44.55

Target(s): 41.40, 40.60
Key Support/Resistance Areas: 44.30, 42.50, 41.20, 40.40, 50-day SMA
Current Gain/Loss: Unopened
Time Frame: 1 to 2 weeks
New Positions: Yes

Company Description:
SPDR S&P Retail ETF (the Fund) seeks to replicate as closely as possible the performance of the S&P Retail Select Industry Index (the Index). The Index is an equal weighted market cap index. The Index represents the retail sub-industry portion of the S&P Total Market Index. The Fund invests in industries, such as apparel retail, automotive retail, food retail, department stores, Internet retail, general merchandise stores, drug retail, and hypermarkets and super centers.

Why We Like It:
Weak personal income and spending data released today, along with weak consumer sentiment that was released on Friday, could be hinting at another slow holiday shopping season. Throw in an overbought market and retailers are ripe for some profit taking. I suggest readers initiate short positions in XRT at current levels. XRT has support at $42.50 so conservative traders may want to wait for this level to break prior to entering positions. However, we also have a good reference point just above the the recent highs to place a tight protective stop if XRT decides to move higher first. Our targets are -4% and -6% lower than current levels.

Suggested Position: Short XRT stock
Options Traders: Buy December $43.00 PUT, current ask $1.71

Annotated chart:

Entry on November XX
Earnings Date N/A (unconfirmed)
Average Daily Volume: 10 million
Listed on November 1, 2010