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However, based on the Conference Board's poll from Monday, the average amount of money that consumers are expected to spend on gifts for the holiday season is $449 -- down moderately from last year's estimate of $466.

On the nationwide level, holiday spending is expected to hit $457.4 billion, up 5% from a year ago, according to the National Retail Federation. I believe this estimate is conservative now that energy prices are well off their four-month highs. In fact, oil and gasoline both are trading at lower levels than they were last December, which should lead to additional discretionary spending.

But despite my prediction for strong consumer spending, I'd be more inclined to take profits in retail stocks at these levels now that the major indices are sitting at five-year highs. While some could argue that the holiday season is traditionally a good period for equities, we can't ignore the huge gains that we saw in stocks during the traditionally subdued-to-lousy September-October period.

That's not to say I believe investors should dump their retail positions. The market has defied many trends during its path upward and stocks could move even higher. But I look at taking profits as a win-win situation. If this group of stocks goes higher, you still own half the position; if they move lower, you can always buy more.

In keeping with TSC's editorial policy, Frank Curzio doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships.

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting