Retail Is Not as Good as It Looks

Retailers continue to advance. Frankly, I think that could be a sign that people are betting that oil is going down and that the rebate checks will matter.

I do not like this group. I think that you should sell into it, because I believe that the most important issue involving retail spending isn't gas prices or food prices but house price depreciation.

House price depreciation is not stopping. That determines how rich people feel and whether it is worth it to spend more to make your house better.

I continue to believe that if you think people will spend more on retail, there are only two stocks that need to be bought right now: Costco (COST - commentary - Cramer's Take) and Wal-Mart (WMT - commentary - Cramer's Take). I think Wal-Mart, when it reports next week, goes to $60. It is the obvious play here. Costco just reported a great quarter so we know that's a winner.

Everything else, every retailer that is going up, is reacting from the good numbers we had yesterday that were obscured by weakness in the financials.

This group is vulnerable, save those two. Oh, and one more thing: I would not possibly chase or own Circuit City (CC - commentary - Cramer's Take). I think that company's business is really tanking and that the company will be lucky to get a real buyer...

A great place to scale out into any strength that we see today.

At the time of publication, Cramer had no positions in stocks mentioned.

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