Dollar General Earnings Amplify Positive Retail Outlook

dollar general dg

Stocks are Historically Expensive

While S&P 500 valuations don’t look very rich by some measures — the index is trading at about 16.3 times forward earnings, below the average valuation during the past five years — they are higher than they’ve been 80% of the time going back to 1928.

Stocks are also historically expensive relative to overall corporate profits, revenue and book value, Davis said.

Elon Musk’s Passion Puts Tesla Stock At Risk

If it seems like Tesla (NASDAQ: TSLA) stock investors can’t catch a break, it’s true. But it’s not just bad luck. We all know super smart people who, no matter how great they were in school, can’t help making poor decisions. Unfortunately for TSLA stock investors, it’s looking more and more like their CEO, Elon Musk, is one of those people.

Elon Musk’s track record was already spotty before a new unsettling Vanity Fair article came out on Sunday. The accusations in the article go far beyond the “quirky genius” label Musk’s followers like to use as an excuse.

Dollar General Earnings: It Doesn’t Get Much Better Than This

Following an impressive display by low-price retailers like Burlington Stores (BURL), Walmart (WMT), and Target (TGT) over the past couple of weeks, Dollar General (DG) was the most recent key player in the space to report outstanding results.

The Tennessee-based company delivered an all-around beat and guidance bump in the second quarter, despite recognizing the adverse impact of increased tariff rates on its bottom line through the end of the year at least.

SPY ETF 5 minute chart

SPY ETF 5 minute chart

This is probably the simplest trading plan you will ever get.

On a micro level, the open price is today's order flow. The most recent barometer of buying and selling pressure. But from a trading perspective (which is different from a chart reading perspective -- remember that chart reading is not trading) it's the purest form of tape reading.

At its core tape reading is defined as "determining if price is moving closer to or further away from a specific reference point." Most traders can't grasp this, they think tape reading is some far off, hard to grasp concept.

But, guess what - we are reading the tape with every trade you enter. We are fixated on our entry price. That number becomes the reference point for tape reading. Our heart pounds with every advance or decline, because we are reading the tape.

The open price, which by the way could be on ANY time frame you trade, gives us a reference point before we place new trades. At it's simplest level, if you want to be a buyer, only buy when the last price is above the open price.

When you combine that scenario with long-term order flow, well you get magic. The 5 minute chart of the SPY ETF shows us how simple trading can be. Yet we make it much harder. Our minds say "It can't be that easy."

I have news for you. It NEEDS to be simple to be repeatable.

Have a great day.


PS. Be safe if you're like me and in Florida waiting for this hurricane to arrive.

Pete Renzulli

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