5/27/22 Retail Winners, Small Cap Breakout


Markets posted another day of solid gains ranging from +2.8% for the Nasdaq to +1.6% for the Dow Jones.

Consumer Discretionary was the top-performing sector.  Several retailer, including Macy’s (M) +19.3%, Dollar General (DG) +14.0%, Dollar Tree Stores (DLTR) +21.9%, and Williams-Sonoma (WSM) +12.8% provided better-than-expected guidance.

The gains were broad with Communication, Technology, Financials, and Industrials all gaining more than 2% on the day.

Real Estate was the only sector to finish in the red, and it was practically flat.

According to a CNBC report, housing inventory has climbed amid higher interest rates. And pending home sales declined in April.


The Russell 2000 represents the smaller cap stock. You can clearly see a breakout from its narrowing trading range on the chart below.

IWM Daily Candles – Chart via thinkorswim

That’s a positive sign for the bulls.

The VIX remains high, but other indicators are neutral ahead of the holiday weekend.

I’m not married to this rally. Daily gains of ~3% are not part of normal bull markets.

That being said I see no reason that the market can’t move higher … we’re just not in a bullish time of year.


We are on the cusp of the Memorial Day holiday weekend.

Markets will be closed on Monday. Tuesday will close out the month of May.

Futures are up this morning. I expect lower volume as many people head to the beaches early.

Be on the lookout for a special Memorial Day message from us on Monday. And our June outlook on Tuesday.

Enjoy the holiday!


*Low Float

^Open Position*AMR has support at $160
TNK has support at $20
CNCE has support at $5
^HDSN has support at $9, resistance at $10
SD is on watch
LPG has support at $16
PANL has support at $6, resistance at $6.65
MOD is on watch
SGML has resistance at $18
PLAB has resistance at $20
ESTE has support at $17
TTI is on watch
HRB has support at $34
UNM support at $34, resistance at $37
AR is on watch

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