NEW YORK (TheStreet) -- With fears of an impending double-dip recession and another major stock market pullback -- further aggravated by Tuesday's third Hindenburg Omen occurrence in less than a month -- it's no wonder that there's been so much emotion in the market.

The theory is that two Hindenburg Omen occurrences within a 30-day window virtually guarantee a stock market crash. The Omen occurs when an unusually high number of companies in the New York Stock Exchange reach 52-week highs and lows at the same time. The proportion of NYSE stock highs and lows must both exceed 2.5% of the total listed on the exchange.

"Look at the market today -- it's not rational," says Neil Hennessy of Hennessy Funds. "It's just emotional. There's a perception in today's market that every company is losing money and everybody's getting laid off, and that is so far from reality. Companies are making tons -- they're paying them out in dividends and more and more is going to happen as we go forward."

This is especially true of low-end retail and low-end consumer discretionary stocks, according to Hennessy. In an interview with TheStreet, Hennessy said he believes it's hard to go wrong with these types of stocks.

> > Bull or Bear? Vote in Our Poll

Read on for more of Hennessy's views on low-end retail and low-end consumer discretionary stocks and why he thinks they are worth the investment.

TheStreet:What types of companies do you tend to focus on?

Hennessy: What we try and focus on is companies that grow at reasonable prices. When you think of price-sales vs. price-earnings, earnings can be manipulated. You can manipulate what you earn. But sales are sales. Unless you're going to cook the books, sales are sales.

One of the areas that we've been in for the last couple of years is low-end retail. If you think about it, people are still going to buy. So a Dollar Tree (DLTR) . That's interesting. It's a pretty good play on the low end.

TheStreet: What about Ross Stores (ROST) ?

If you think about Ross -- if you're going to buy your niece a sweater for her sixth birthday, before you'd probably go to Nordstrom (JWN) . But why go to Nordstrom? She's going to outgrow it any way. Why not go to Ross, so you're going to buy that sweater for $20 instead of $100?

Low-end retail. They have such a better chance to increase their margins over middle to high. If you take a $20 sweater and a $100 sweater from Nordstrom, it would be a lot easier to raise that sweater from $20 to $24 than it is to raise it from a $100 to $120. And so on low-end retail, you start to think about it, they can raise their margins and still do the same in sales, so their opportunities are so much better.

TheStreet: What other stocks recommendations do you have?

If you look at Tractor Supply (TSCO) , they're expanding across the United States -- farm equipment, lawn tractors, feed, all kinds of stuff for small, middle-range ranchers. And they have done extremely well.

Also, O'Reilly Automotive (ORLY) , if people aren't going to be buying new cars, then they're most likely going to be fixing their cars, changing their own oil in a slow economy. O'Reilly is not bad.

You can also look at Tupperware (TUP) . You start to look at Tupperware and you think about it -- if the economy slows and people aren't going to go and buy the meats -- and if you do, you're going to use a lot more leftovers. Tupperware, not a bad play in a slow economy.

You can also look at Darden Restaurants (DRI) . With Darden, you're going to be on the low-end of the eating chain, instead of going to Peter Luger's.

Then there's Ball Corp. (BLL) . They make about 60 billion cans a year. That's what everything gets packaged in. So if you think about fresh vegetables, they're a lot more expensive than canned vegetables. So people in a slow economy will buy the canned vegetables. So those are low-end consumer discretionary.

Del Monte (DLM) is a consumer staple and if you think about Del Monte, it's canned food. It goes into the same story. They take the vegetables and put it in cans. So that's the lower-end retail.

Coke Enterprises (CCE) , now you're talking about the bottling and everything else, so there's a lot of different ways to play it.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

>To follow the writer on Twitter, go to Andrea Tse.

>To submit a news tip, send an email to: tips@thestreet.com.

RELATED STORIES:

Get more stock ideas and investing advice on our sister site, Stockpickr.com.

Follow TheStreet.com on Twitter and become a fan on Facebook.

Follow Andrea Tse on Twitter and become a fan on Facebook.

Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.