Baltimore, MD 1/14/17: Retailers got the steel tip of a boot this holiday season.

Macy’s (M), Kohl’s (KSS), JC Penney (JCP), Sears (SHLD). You name a retailer and it was likely a holiday to forget. In fact, overall retail sales were weaker than expected in December 2016.

Retail sales ex-autos were only up 0.2%, far worse than expectations of 0.5%. If it weren’t for auto sales up 2.4%, it’d be a much uglier picture.

However, now that the disasters have been priced in, some retailers are beginning to bottom out and dare I say it, bounce.

Nordstrom (JWN) for example has become aggressively oversold, catching and holding $44.20 with oversold RSI, MACD and Williams %Range. We could see at least a quick bounce here should support hold. You can buy to open the JWN April 2017 45 calls at market. They last traded at $2.90 x $3.00.

But it’s not the only retailer likely to bounce. Kohl’s (KSS) could, too.


Historically, when KSS RSI, MACD and Williams’ %Range get this low, we typically see a rebound shortly after. The stock looks to have also caught good support at current prices of $40.79. As long as that holds, the stock could refill that bearish gap near $50.50, near-term. Consider buying to open the KSS February 40 call up to $2.65.

Which brings me to the “powerful strength” of employment.

While the powers that be will tell you we’ve added 9.9 million jobs in eight years, look a bit deeper. We’ve also lost 14.6 million jobs from the U.S. labor force.

And before you claim the baby boomer factor, stop.

Nowadays, 95.1 million Americans are no longer counted fairly. And while wages grew 2.9% year over year, it’s nowhere near the 4% growth we witnessed when unemployment was last at 4.7%. If we truly had 4.7% unemployment, slack in the labor market would have been absorbed, and wages would be much higher.

That’s just part of the reason retail sales have been pathetic.