February chills retail, lights, and gas - showing it pays to trade the calendar.
For Wal-Mart (WMT) and Costco (COST) Spring is not in the air... With the Northeast experiencing one of the coldest February's on record, the new Spring collections only collected dust on the racks. That left sales figures, released today, below Wall Street's expectations. And today's data was just one example of the weather freezing profits. Is there a way to exploit seasonal trends for trades?
Jeff Macke says in this market you have to make trades and take trades. He reminds us that earlier in the week he said to be long on retailers going into today’s store sales number and get out of dodge the second those numbers came out. That trade worked well today. If you’re going to be trading the retailers this time of year, Jeff says you have to get long for the catalyst and then get out once you get that catalyst.
Jeff also recommends being long on the consumer names in the Fall when you get Back-To School sales going into Christmas.
Eric Bolling says the gasoline chart continues to rock. Gas is on fire. It keeps going up. Eric says the trade is to stay with what’s working. The refiners are working. Don’t sell them – get long own them – or get a dip and own them again. Bolling likes Tesoro (TSO) and Marathon (MRO).
Guy Adami says the trade is Lamar Advertising (LAMR). His driving patterns make him think that billboards change more frequently between Spring and Summer. Guy believes billboard ad fees are going to go up. He says you can own LAMR when it’s down a buck and a half. And Guy says Clear Channel (CCU) is a buy at $42.
Tim Strazzini took the other guys down by saying most seasonal trades are priced in by the markets. The one place where it’s not priced in, is the energy sector where you get inventories and unpredictable weather patterns. That’s a space where you get anomalies the market doesn’t smooth out.
Dylan says the bottom line is retail does better in the Fall that it does in the Spring so watch yourself over the next couple of months.
On MAR 8, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders. Strazzini Owns (EWG), (WMT), (YHOO). Bolling Owns (MPEL), (SZE), (VE), Gold, Silver, Soybeans, Is Short S&P Futures, Is Short Nasdaq Futures, Is Short Natural Gas, Is Short Corn. Macke Owns (JWN). Strazzini Owns (FLS), (SNDK)