Wednesday, February 15, 2012

China doing the Talk, Women's Apparel doing the Walk

Yesterday's downgrades of European companies by Moody's of Italy, Spain, Portugal saw some selloff in the Asia session , however we got some bounce on good German confidence and a good Italy auction of bonds.

Today's Asia sessions started off weaker much the same, however Chinese Premier Wen said he's more willing to get involved in resolving Europe's debt crisis.  Leading to a euro bounce of it's 1.306 lows and now sitting around 1.316.  We should get a test of 1.34 soon.

Gold has been holding 1700 and Oil 100 - both key levels, and sp500 is probing it's top level of 1350 - this combined with the Nasday breakout should see some upward move, after seeing cosolidation of the past week, the market should position itself higher by Friday.

An interesting thing in my research last few weeks has been the strong price action in women's fashion retailers - we've got LULU trading at a hideous 57 p/e of which I'm short, and Michael Kors trading at an even higher valuation (but in my opinion better branding) after it's current positive earnings report .  Also doing well, but more modestly priced and a Tepper favourite - Body Central Corp .  It's probably an anomoly given the weakness in retail industry globally - but can women's fashion really be the niche standout in retail in 2012 ?
I think I might be spread trading body/lulu over the comings weeks - just need to get through all their past reports first.