The most beaten-down retailers received the most action on the day that has become synonymous with an avalanche of returns and exchanges. Work from Core saw retail clusters surge 69% in 2024. But those hanging by a thread (no pun intended) shined yesterday. The day after Christmas was perfect for the ‘Island of Misfit Stocks.’

This is what we call serious bottom fishing. There has been some over the past two weeks, but this was the most concentrated thus far. It's clear some traders think tax-loss selling has created opportunities, but there are names like Starbucks (SBUX); many, including myself, have been spying for an entry point (I’m not sure the turnaround has begun, but the new CEO bottom could be in).

Target (TGT) might be more than bottom fishing as well, although, at this point, I would need to see a new amendment to be more than a swing trader on the stock. The most interesting is Lamb Weston Holdings (LW), which has seen its share price crater on several occasions since late 2023. The company is a supplier of McDonald's french fries. 

Half Full

There are two ways to view the session on Thursday.

It gapped down and roared back, but couldn’t seduce buyers off the sidelines, so it couldn’t stay in the green at the closing.

I’ll go with half-full. Seeing buyers show up after futures were profoundly negative ahead of the open was impressive. Most investors and traders could have taken the day off to drink eggnog.

Sector Performance

Consumer Staples (XLP) and Financials (XLF) led the way, perhaps buoyed by the notion of banks taking on the Federal Reserve. The Fed has blown it in many ways, which is the perfect time to blow it up. Congress should give them a fundamental charter that doesn’t just enrich the wealthiest.

Breadth Improves

Advancers beat decliners across key indices, with the S&P 600 Small Cap Index (SML) enjoying the most substantial ratio.

The S&P 600 has a lot of work to do before a “buy” signal, but it's bouncing off a Relative Strength Index (RSI) low, and Money Flow (MF) is running.

Today’s Session

Once again, the futures were in the red and the major indices have opened in the red.

The Ten-Year Treasury Yield (TNX) is up 2.4 basis points this morning and holding above 4.6%.

This is the 2^nd day in a row that the CBOE Volatility Index (VIX) has tested its 200 MA at $16.04, after falling below this level on Christmas eve.

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