After $M, $JWN, and Others, Retail Bears Aim at $TGT

By Sang Lucci Uncategorized

By Sang Lucci

With the SPY lower on Monday, and further red continuing through Friday, bearishness was the theme of the week. Within that red is a deeper pessimism towards retail, which is now in earnings season with Macy’s, $M, and Nordstrom, $JWN, having reported on Wednesday and Thursday, respectively. Both names were tagged by put sweepers before their substantial post earnings moves down, and the bears are now aimed at Target, $TGT, which reports next week.

For $M, both Volume and Open Interest dominated on the put side, with the 11/13 $45.5 Put’s volume being the most notable strike, followed by the $46. The following chart of the 11/13 $M $45.5 Put tells you everything you need to know about the market’s reaction to their earnings:

Similar gains can be seen in the the monthly November $JWN $62.65 Puts, seen below:

$TGT reports earnings next Wednesday, and continuous bearish steam has been flagged in the name over the past few weeks. The most notable action of today is a sweep for this month’s $TGT Nov15 $70.5 Puts, a $512k bet (the contracts purchased for $2.08 each). The put volume and open interest over several strikes in the November monthly has been substantial, and completely dwarfs the call activity:

On top of the market weakness, retail could move further red after poor reports this week from $M, $JWN, and others. Sentiment is clear, so be ready and position yourself for more big moves.

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Sang Lucci

Sanglucci.com has been one of the leading trading education resources and communities since it's founding in 2010. Sanglucci.com has trained thousands of traders through its unwavering transparency, singular expertise in Tape Reading and options strategies, and it's game-changing partnership with the infamous Wall St. Jesus.

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