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Retail Enters the Arena

As the market tracks every tidbit, the retailers step to the fore.

Editor's note: This column was originally published on RealMoney on May 11 at 8:49 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.

Retailers will receive some attention today as same-store sales for May are set to be released. The numbers should help reveal just how much of April's gains were the result of that "late" Easter.

But the same questions will persist -- whether a slowdown in housing and the refi market, coupled with higher fuel prices, are crimping consumer spending.

Two big retailers reporting earnings include

TST Recommends

Kohl's

(KSS) - Get Report

and

J.C. Penney

(JCP) - Get Report

(JCP). I'd like to be bearish on Kohl's but I can't find a reason to get short ahead of the earnings beyond the fact that the stock is approaching an old high near $58 and could be forming a double top. It's better to wait and see the results and the effect the response has on the I.V. If there's enough of a decline, could make the puts cheap enough to try some downside exposure.

In general market action Wednesday, the VIX contracted after the FOMC meeting concluded yesterday afternoon and finished below 12, which is just above its 10-day moving average.

This low reading is not so much a sign of complacency as it is merely reflective of actual low volatility being exhibited by the

S&P 500

. The index has been within a 10-point trading range for the past three days, and, if you back out Friday's big rally, the 30-day historic volatility would be down to about 8%.

Steven Smith writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He was a seatholding member of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) from May 1989 to August 1995. During that six-year period, he traded multiple markets for his own personal account and acted as an executing broker for third-party accounts. He appreciates your feedback;

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