Retailer Bargain Bin: AEO, M, TGT

Many of the retailers I've looked at seem to be in the process of making nice bounces off their recent lows and re-tests of previous lows. It's worth taking a look at AEO, M, TGT. It's difficult to believe that retailers can be "off to the races" as the economy has not recovered. Having said that, these manes are very oversold and the ones with good balance sheets will survive. In the short run, take a look at some retailers for a potentially nice trade.

American Eagle Outfitters (AEO)

Target Corporation (TGT)

I wrote in my last post about TBT, the Ultra Short 20+ Year Treasury ETF. Yesterday the Fed announced that they would be buying Treasuries in the open market to keep interest rates low to promote economic recovery. This development most likely will put a pause on the TBT. While I still believe that Treasuries are over-bought and that a variety of reasons (eventual move to riskier assets, worries over deficits, inflation) will push Treasury prices lower, there is the old adage, "Never fight the Fed." With the Fed buying it's hard to short the Treasuries. The TBT trade looks like it is on hold for now. I'd get out of TBT or at least reduce one's exposure to it. When the Fed reverses its policy, which it will when the economy recovers, TBT will move fast.

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