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Take Your Position: Retail Sales

The SPDR S&P Retail has gained about 6% over the past month. As we head into same-store sales data, what should you expect when the numbers are released, Thursday?

Analysts are calling for an average decline of 1 percent in sales at stores open at least a year, according to Thomson Reuters data.

Though that’s a signal of weakness, such a decline would be the smallest monthly drop since September 2008.

For more than a year, value has been the key proposition for shoppers, and that is unlikely to change soon.

"Anywhere that people feel like they're getting a perceived bargain, that's where people are going to be attracted right now," says Steve Ferrara, a partner in BDO Seidman's retail and consumer product practice.

Discounters TJMaxx and Ross Stores are among the few retailers expected to post increases. Analysts expect high-end stores such as Saks and Nordstrom to report deeper declines than chains with more of a value message, such as Kohl's and JC Penney .

"People are just pulling back in general," adds Patty Edwards of Storehouse Partners and a Fast Money friend.

Once again, analysts expect Abercrombie & Fitch to post the steepest drop of any retailer, at 19.9 percent. However, there are also bright spots expected with Aeropostale and Gymboree likely to profit from back-to-school sales, according to FBR Capital Markets analyst Adrienne Tennant.

What’s the retail trade?

One of my top picks is Macy’s says Citi retail analyst Deborah Weinswig. They’ve taken a localized approach trying to put the right products into the right stores.

And off-mall retailers are continuing to do better than their mall counterparts. I'd look at Target and Kohls .

In the space I like Aeropostale, Gap and The Buckle , adds Joe Terranova.


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Trader disclosure: On October 7, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), BTU); Terranova Owns (NOV), (MOS), (JPM); Terranova Is Short (CCL); Terranova Is Short (WYNN); Terranova Is Short (GRMN); Terranova Owns Dec. Gold Futures; Terranova Owns March Sugar Futures; Terranova Owns Crude Futures; Seymour Owns (ACI), (AA), (STD), (BX), (BAC), (SBUX); Seymour Owns (RTP); Najarian Owns (C) Calls; Najarian Owns (BRCD) Call Spread; Najarian Owns (DFS) Calls; Najarian Owns (DELL) Call Spread; Najarian Owns (GE) Calls; Najarian Owns (JPM) & Short (JPM) Calls; Najarian Owns (HMY) Calls Spread; Najarian Owns (LAZ) & Short (LAZ) Calls & Long (LAZ) Put Spread; Najarian Owns (MSFT) And Is Short (MSFT) Calls; Najarian Owns (MYL) Calls; Najarian Owns (PLCM) Call Spread; Najarian Owns (TEVA); Najarian Owns (ORCL) & Short (ORCL) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (WFC) Puts; Najarian Owns (YHOO) Call Spread; Najarian Owns (DFS) Calls

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