Retail Companies On The Hotseat This Week

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Last week was filled with bullish developments, but on Friday the focus was bearish news in retail sales, so let's start there.

Retail sales was expected to be up +.1% but as shown by the chart, it came in with a surprising -.6%.

This is particularly noteworthy considering that next week is a big week for earnings from retail customers as shown by the table below.

As you’ll see below in the table below of these stocks analyzed with PRIME ratings the technical setups are not great.

In the table below I’ve highlighted the pockets of bullishness. As you can see they are hard to find. WMT has a bullish Real Motion divergence so the intermediate term condition would support a move higher if one can get started.

The media will focus on retail earnings but as you can see by the highlighting of the sectors table the bull market is broad and strong without any help from retail, semiconductors, and a despite a headwind from bonds!

The market continues to be fueled by improving expectations for future earnings as you can see by the chart below.

 

 

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Every week we review the big picture of the market's technical condition as seen through the lens of our Big View data charts. The bullets provide a quick summary organized by conditions we see as being risk-on, risk-off, or neutral.  The video analysis dives deeper.

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Summary: Market conditions remain broadly risk-on, with major indexes near or at new highs, improving breadth, momentum and volume, low volatility, strength across U.S. and foreign equities, and favorable seasonal trends through the end of August. Some caution remains beneath the surface, including weak retail, potential resistance in semiconductors and regional banks, falling long-term bonds, a softer dollar, and continued strength in gold that is keeping the broader risk gauges neutral.

Risk On

• Key U.S. market indexes closed mostly up, with IWM and Nasdaq leading on the week and the S&P and IWM making new all-time highs. Real Motion is showing positive momentum, particularly on longer-term readings. (+)
• Volume patterns have strengthened a bit, confirming price action with more accumulation than distribution days. (+)
• The majority of sectors were up, though retail and consumer discretionary were hit the most. Overall, a risk-on reading. (+)
• Market internals improve, confirming the recent market price action and taking out the highs of the last couple weeks in both the NYSE and NASDAQ. (+)
• The 52-Week new high new low ratio continued to trend positive and improving overall. (+)
• The color charts (moving average of stocks above key moving averages) continue to improve and show risk-on nearly across the board. (+)
• Volatility confirming price action, trading at its lowest levels since December 2025. (+)
• Value hit a new all-time high and both value and growth are in solid bull phases with positive momentum. If growth breaks down below $88.00, it would be something to watch for an early turnover in the markets. (+)
• The modern family is overall strong, with five of the six members in bull phases. Semi’s are the lone holdout, but they have bounced nicely from their huge sell-off in July. Two concerns would be a potential triple top in regional banks and if Semiconductors rejects its 50-Day Moving Average. Also of note, retail has been weak for a few weeks.(+)
• Foreign equities were strong, with emerging markets regaining its bull phase and developed foreign markets hitting new highs. (+)
• Seasonal trends point to a tail-wind through to the end of August. (+)

Neutral

• Risk gauges remain at a neutral reading with the strength in Gold. (=)
• Soft commodities were mostly flat on the week. (=) 
• Gold continued to follow-through on its important breakout. (=)
• The dollar has been under pressure since late July, closing back near its lowest levels since May. Bitcoin closed back below its 50-Day Moving Average.(=)

Risk Off

• Bonds continue to trend lower, particularly on the long-end of the yield curve with TLT putting in a new recent low intra-day on Friday. (+)

 

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Actionable Trading Plan

Maintain a bullish bias and normal-to-moderately aggressive exposure, as the weight of the evidence remains risk-on. Favor equities showing strong momentum and relative strength, particularly areas participating in the improving breadth, while allowing existing winners to run rather than taking profits simply because indexes are at new highs.

• Look to buy constructive pullbacks and breakouts, especially when accompanied by improving volume. Avoid chasing stocks that have become excessively extended; use weakness toward support or consolidation periods to establish positions.
• Favor broad participation. Strength in small caps, value, growth, and foreign equities suggests opportunities beyond the largest technology stocks. Look for leadership emerging from areas benefiting from the broader market advance.
• Maintain existing profitable positions while momentum and market internals remain supportive. Consider trailing stops or raising stops beneath meaningful support as positions become extended.
• Keep some dry powder. Despite the strong backdrop, neutral risk gauges and strength in gold suggest investors have not completely abandoned defensive positioning.
• Watch semiconductors closely. A successful move through the 50-Day Moving Average would strengthen the bullish case, while rejection could indicate that an important leadership group remains impaired.
• Monitor regional banks and retail. A failure by regional banks around their potential triple top or continued deterioration in retail would be early evidence that breadth is becoming less healthy.
• Use growth as an early warning indicator. A breakdown below the identified $88 level would warrant reducing aggressive exposure, tightening stops, and reassessing whether the current risk-on environment is beginning to turn.
• Respect the bond/gold message. Falling long-duration Treasury prices alongside a strong gold breakout and weaker dollar could signal changing inflation, fiscal, or interest-rate expectations even while equities remain strong.
• Take advantage of the seasonal tailwind through late August, but become progressively more selective as that favorable period approaches its end.

Bottom line: Stay invested and continue looking for long opportunities while breadth, momentum, volume, and volatility confirm the advance. Rather than anticipating a top, let deterioration in growth, semiconductors, market internals, or other leading indicators trigger a shift toward smaller positions and higher cash levels.

 

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Keith's Weekly Market Analysis Video