Unlike most folks, I did not do any holiday shopping over last month’s “Black Friday” weekend. But a lot of other people did go shopping, and many of them didn’t leave home to do it. Instead, they shopped online from the comfort of their favorite sofa using a smartphone, laptop or other portable device.

Regardless of the precise means, the American consumer is alive and well as evidenced by the record number of online transactions this year.

About half of all online sales over the Thanksgiving weekend were made through Amazon.com (NSDQ: AMZN), which explains why so many retail stocks have lost ground this year.  The SPDR S&P Retail ETF (NYSE: XRT) lost nearly 11% through the first ten months of 2017 while the SPDR S&P 500 ETF (NYSE: SPY) gained more than 14%.

That’s a huge difference in performance.

We’ve seen it before, most recently when energy stocks got creamed when the price of oil fell below $30 a barrel two years ago. But that made sense since low oil prices are bad for most energy companies but good for the overall economy. This time, it seems what is good for the economy is bad for the businesses that enable its primary form of commerce.

However, the market doesn’t always get it right. At its extremes, momentum takes over driving up the value of trendy stocks to lofty heights while pushing down the prices of their less popular peers to equally depressed lows.

When that happens, which stocks you own can make a huge difference in how well your portfolio performs since reversion to the mean should eventually reverse those trends. I believe we are in the midst of such an event. I don’t think it will end in a full-blown crash, but I feel we are getting close to a day of reckoning.

If so, then what will be the catalyst that sparks that turnaround?

Dead Money No More

It could be nothing more than a solid showing this quarter by some of the retailers given up for dead. In fact, that may already be happening. Macy’s (NYSE: M) lost more than 60% of its value this year before bottoming out below $18 a month ago. But since then it has risen above $24 as fears over its holiday sales results has subsided.

Likewise, Kohl’s (NYSE: KSS) lost 40% of its value during the first half of this year but has regained more than half of that since then. To be sure, many of these stocks still have a long way to go before they can declare victory. But it looks like the worst may be over for many of them, which is usually a good time to buy back into the sector.

Logic dictates that you can’t have economic growth without increasing sales. If GDP really is going to grow at the 3 – 4% rate the stock market is anticipating, then there will be many winners and not merely a few.

So far, that’s not how the stock market sees it. Instead, the rich get richer while the poor get poorer. Amazon is now priced at 146 times next year’s earnings, while Target (NYSE: TGT) is valued at only one-tenth that amount.

Clearly, Amazon deserves a higher valuation than does Target given its growth curve, but I believe the truth lies somewhere in between. The death watch for the retail sector may soon be over, and when it is there will be a lot of money to be made in its survivors.