About a year ago, I warned about getting overly excited about the Black Friday hype (see Is Black Friday the time to sell the Retailers?). I had identified a seasonally weak pattern for retailing stocks in December. Hype about Black Friday retailing results didn`t help investors in these stocks either.
Sure enough, retailing stocks exhibited a pattern of outperformance into late November and then dropping off in December last year, as shown by the chart of the relative performance of XRT to SPY:
A glance at the seasonal relative return pattern for retailing stocks showed that they tended to underperform the market in December.
This year, I reiterate my warning. If you want to go shopping this Black Friday, I suggest that you don`t buy retailing stocks.