It was a huge break down in consumer discretionary relative strength this week. No doubt, it is UGLY.
This is something that has been building for quite awhile. A new factor here might be this new ice cold weather that's popping up on forecasts for the next couple of weeks. Nat gas prices have actually jumped about 20% in seven trading days.
We know the farmers almanac suggests this will be another rough winter. Remember how much 'weather' effected last year's holiday sales? The market may be starting to price that in now.
There are a couple of factors that make me think that holiday spending isn't going to be dreadful and actually has decent potential. Be sure to check out my latest See It Market piece.
In short, we've clearly got some broad consumer weakness now, but we may be setting up for some upside surprises from holiday spending and the consumer is far from dead, just more cash strapped and responsible
Trade 'em well!
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