Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- high vs. low in retail,
- too much heat in tech stocks, and
- this illogical market.
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Retail's High End vs. Low End
Posted at 1:20 p.m. EDT, Oct. 5, 2009 Are we back to the old days of high end vs. low end in retail? That's what I think about when I look at the resurrection of Coach(COH), Tiffany(TIF), Williams-Sonoma(WSM) and Nordstrom(JWN). I regard these four as the best test of spending by the rich, and judging by their performance in the last couple of months, the rich are spending again. These stocks have been unremitting in their rallying, and they show no signs of stopping, and the Nordstrom ramp today continues the trend. Boy, is that stock up too high, in my opinion. Nevertheless, it doesn't matter. The facts bear out the run. But they are the only ones that have showed any life. Last week we saw a rollover in Family Dollar(FDO) as well as stallings in Big Lots(BIG), Bed Bath & Beyond(BBBY), TJX(TJX) and Ross Stores(ROST). All four of those stocks look like they are rolling over and seem ripe for the shorting. The lowest end simply doesn't act well at all. Then there's the middle ground. Kohl's(KSS) and J.C. Penney(JCP) have acted well, the former being the strongest one in the group for a long time, and the latter seemingly playing catch-up. Macy's(M) seems to hang in; it could go either way. But Target(TGT)? The worst in show. No lift, no life. And in many ways that's the tale of this tape. As we go into retail sales hell this week, I think we will see nothing good from any of the weaker ones but a continuation of strength from the rich who have gotten their fitting and are spending again. (Wal-Mart(WMT) is the never-moving anomaly, can't get out of its way. Costco(COST) has said good things and could reignite on any consistency with the last words said when it reports this week. I discount either as a tell. Home Depot(HD) and (LOW) are different battlegrounds, with HD slowly improving and Lowe's slowly going nowhere. They are housing plays and need to be watched, like Black & Decker(BDK), Masco(MAS) and Fortune Brands(FO), but they've been holding in because California, at least in the case of HD, has turned, and California's a huge part of HD.)
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