Recent action has left many technical developments worth watching… leaving even us chartists trying to decipher what is noise and what is not. Today’s report will discuss a notable risk-off development and what that means for markets as we move into December- and whether the move marks need for a shift in your allocation to close out 2025.

While there is a virtually endless number of possible relative strength (RS) combinations available to you at any point in time, there are some that stick out more than others. When it comes to sector strength, the majority of the NDW analyst team will reference a 3.25% RS chart between broad staples fund XLP & discretionary fund XLY. Zooming out of the pure one-to-one relationship, understanding who wins this RS arm wrestling contest can provide insight into broader market themes in play. Speaking plainly, discretionary names in control suggest a more risk-on tone in the market, while a preference for staples dictates that more risk-off options may be gaining favor. With the start of November’s decline, we saw this RS relationship move back into X’s in favor of XLP, suggesting a near 10% performance swing in favor of staples (3.25% per box, three boxes needed to reverse.) There is a bull and bear case here- bulls would point to the string of RS sell signals suggesting XLY retains long-term strength… and bears would say that every new trend starts with a 3-box reversal. There is an argument for both, but there does seem to be a bit more convincing of a picture for the bulls. After all, a portfolio following every reversal for this specific chart hasn’t been additive vs. a pure buy and hold of either fund since 1999. Signal switching on the other hand, has. All this to say, those investors concerned only with the long-term RS signal would still own the risk on representative XLY.

There is evidence to suggest that the preference is risk-on littered throughout the platform. Domestic equities retain their first position on the DALI page, headed by the likes of technology, comm. services, etc at the top of the intra sector rankings. The asset class group scores page sees consumer staples at the bottom of the heap and the only sector that ranks below cash. While the spread between staples and discretionary has certainly dropped to start November, the long-term picture is quite clear: risker sectors remain in control.

All this to say, remember to prioritize long-term strength when looking at trends around the platform. Today’s report isn’t to say that it won’t be important to watch how these risk-off changes develop as we close 2025 (as they certainly will be…) but none of the changes we have seen dictate you take a major shift ahead of your year-end client reviews. For any questions, remember to continue to read the daily report and set alerts on key relationships to be automatically notified of any changes.

With year-end right around the corner, most Americans are deep into their holiday shopping, much to the enthusiasm of retailers across the country. This year, 187 million Americans are expected to participate in shopping from Black Friday to Cyber Monday (source: NRF.com). Meanwhile, Deloitte anticipates holiday sales from November through January to increase by as much as 3.4%, totaling $1.6 trillion in spending. The next couple of months are easily the strongest of the year for most retailers, and investors might wonder if that same strength extends to the price of retailer stocks. Given the strong seasonality ahead for retailers, is now the right time to add exposure to the group?

Despite November and December being the strongest seasonal period for both equities and consumer spending, retail companies have not historically behaved as one might think during the holiday season. From Black Friday through the end of the year, the SPDR S&P Retail ETF (XRT) averages a return of just 0.03%, with a slightly worse median return of -0.81%. As a result, the start of shopping season hasn’t always been the best time to shop around for retail stocks.

Part of this weakness might be driven by tax loss harvesting, as declines have been more common when XRT is negative YTD heading into black Friday. When the fund enters Black Friday with a negative YTD return, it’s down in 75% of year-end periods, with an average return of -2.4%. Meanwhile, the fund averages a 1.2% gain after entering Black Friday in positive territory, which could bode well for retailers given XRT is slightly positive this year.

Retailers also tend to perform better leading up to the holiday season, in addition to the quarter following the end of the year. Virtually all of XRT’s average gains in the fourth quarter have come before Black Friday, as it’s positive in 80% of those periods while averaging a 5.2% return. Meanwhile, the financial results of companies from the holiday season are usually reported in the first quarter, during which the retail fund averages a 3.6% gain. As a result, we’ve seen the market buy both the rumor and the news for retailers, with stocks moving higher on the anticipation of holiday shopping and the subsequent financial results of said spending. With XRT potentially benefitting from a seasonal tailwind entering Q1, does the technical profile for retail stores suggest further strength next quarter?

The rise of e-commerce giants has put a stranglehold on brick-and-mortar stores over the last decade. Since the start of 2015, the S&P 500 has grown over 220%, but retailers have lagged far behind, with XRT posting a cumulative gain of only 66.5%. As a result, XRT has lacked long-term market relative strength since 2021 and is still 23% below its highs that year. Retailers are roughly flat this year, driven by the weakness of smaller stores with XRT tracking an equal-weighted index. The ETF is on three consecutive sell signals and is currently testing its bullish support line. Overall, its technical picture is mixed, holding a barely acceptable fund score of 3.04, making it more of a hold than a buy.

Retail giants have performed better than the average store this year, with the cap-weighted VanEck Retail ETF (RTH) up 10.6% YTD. The fund has traded in a positive trend since 2023 and maintained long-term market relative strength since early 2024, culminating in a strong fund score of 5.03. On the more sensitive two-point chart, RTH is on four consecutive buy signals with support at $244. Those looking to take advantage of holiday shopping within their portfolio could look towards RTH or targeted stock exposure.

One of the strongest stocks in the retailer space is TJX Companies (TJX), which owns businesses like TJ Maxx, Marshalls, and HomeGoods. The pick fits into the macro narrative that consumers will opt for off-price apparel this season as inflation remains sticky and consumer sentiment moves lower. As for the stock, it looks technically sound with a 5 for 5 attribute rating after regaining near-term strength versus its peer group on Friday. TJX has traded in a positive trend since 2022, during which it’s closely followed its trendline. Those looking to buy could do so here or in the mid to lower $140s, with initial support at $140 and $136 followed by the bullish support line at $124.

Daily Option Ideas for November 24, 2025