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Time To Get Short Christmas?

Is all the good news baked into retail stocks? Should you make like the Grinch and turn your back on Christmas, all together?

Steve Cortes of Veracruz thinks so.

He’s not green with red eyes and bad teeth -- and he doesn’t live on Mount Crumpet just north of Whoville -- but he’s as done with Christmas as the misanthrope who’s heart was two sizes too small.

With the S&P Retail Index jumping on Thursday he says the Christmas trade is over.

Disinflation is leaving stores with no pricing power, he laments. As evidence I’d point to last week’s earnings from Kroger . Even grocery stores don’t have pricing power and I think that's a problem.

I’m also "grinchy" because of action in Apple , he says. Apple is an excellent read on consumer discretionary and an excellent lead. But Apple has been lagging the market for the past 6 weeks and lately having trouble getting above $200.

What’s the trade?

I’d short the XRT versus the SPY, says Cortes.


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Trader disclosure: On December 10th, 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); Finerman's Firm Owns (MSFT), (WMT), (AAPL), (FLS); Finerman's Firm Is Short (IJR), (IWM), (SPY), (MDY); Finerman's Firm Is Short (UNG); Finerman's Firm Owns (BAC) Preferred, (BAC), (BAC) Call Spread; Finerman Owns (BAC) Preferred, (BAC); Finerman's Firm And Finerman Own (WFC) Preferred; Seymour Owns (AAPL), (EMM), (INTC), (PFE), (TKC), (BAC), (FXI), (GE), (POT); Seymour's Firm Owns (MTL); Najarian Owns (BRCD), ; Najarian Owns (PFE); Najarian Owns (TEVA); Najarian Owns (AAPL) Calls; Najarian Owns (DELL) Calls; Najarian Owns (FCX) CAlls Spread; Najarian Owns (INTC), Is Short (INTC) Calls; Najarian Owns (TXN), Is Short (TXN) Calls; Najarian Owns (RIMM) Call Spread

For Steve Cortes
Cortes is Short (XRT)

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