RTH Retail Daily Chart Overbot Rising Wedge Negative Divergence Retail Sales Data On Tap

The Retail Sales number is only two hours away.  The importance of this number cannot be underestimated.  The broad markets traveled sideways the last few days to allow this data point to decide the fate of the broad markets. Keystone continues to wait for Godot, maintaining shorts against the retail sector via the dangerous and thinly-traded SZK and RETS ETF's and cycling in and out of RTH shorts.  The RTH weekly chart is in universal negative divergence.  The daily chart above shows a rising wedge and overbot stochastics and firm negative divergence (red lines).

Over the last couple weeks, the short green lines wanted to see a higher high with price so the door must be left open to 43.50-43.80 as the top.  But the Retail Sales number will obviously tell the tale. If the retail sales are strong, watch the price action at 43.80-ish. It does not appear likely, but if 43.80 is taken out then 44.20 is targeted.

The data in two hours also provides an important proxy for technical analysis. The charts want the retail sector to roll over now, and we find out shortly if the data reinforces the chart, or not.  The projection is for the retail sector to roll over regardless if better than expected retail data occurs this morning.  Keep an ear open for the back-to-school sales results which can serve as a basis to project upcoming holiday sales. Type 'RTH' into the search box above to view the weekly chart from a few days ago which has not changed. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Note Added 8/14/12 at 9:15 AM:  Retail Sales come in a bit better than expected although very much in line with the consensus analysts estimates. HD earnings beat on the bottom line but missed on the top line.  KORS and EL are outperforming. COH is weak. Watch RTH today and note how the price reacts; strong upside, or, sell the news, or, moderate upside to lock in the negative divergence as described above.