Today I replaced nearly half my SPY short with a variety of other short positions. I shorted Simon Property Group (SPG), the homebuilder index (XHB) and the equal weight retail index (XRT). This is a reflection of my view that the consumer will continue to deleverage and that the housing recovery will be prolonged.
The reason that I chose this week is that I wanted to wait until after Christmas before shorting retail. I have found that retail stocks are typically strong starting in August and leading to Christmas. The homebuilder index actually contains many retailers like Home Depot. I outlined earlier here and here why I believe now is the right time to short Simon Property Group.