Here comes the stupidity

Look for a big gain tomorrow due to the so-called experts reporting all is well. The masses were out spending like madmen. They were buying TVs they don't need on the weekend. And this will lead to a 2% gain in stocks tomorrow which will also be the time for me to start the put buying game, this time on retailers.

It's pretty simple really. People are tapped out. They are hanging on only due to the fact their credit cards have not been fully maxed. Their houses are losing value by the minute. The dollar is losing purchasing power by the second and gas is well over $3 a gallon. It is simply illogical to think that given all that people will be spending more on useless shit this Christmas than the last.

If you believe people spend more when they have less, then by all means buy retailers. If you think people spend less when they have less, well, you know what to do.

RTH and XRT are two widely held Retail ETFs. Both will probably come flying out of the gate tomorrow morning.

RTH has done better lately, and by better I mean not as badly. It has some grocery stores like Kroger and Albertson's whereas XRT doesn't. If I were to short, I'd go with XRT since grocery stores will probably post better sales given the increased cost of food staples. No matter how much milk and bread costs, people will buy the same amount. As the econ geeks will attest, those are inelastic goods, demand remains constant despite price.