For most of us, the current economic conditions reflect a pretty sorry state of affairs. But apparently, the worst of times for some is also the best of times for others ...

While the average American was happy just to be employed, earned wages on the uppermost end of the salary spectrum saw a five-fold increase last year. Even as the rest of the country struggles to keep to keep their heads above water, the very wealthy continue to prosper.

Of course, with mid-term elections just around the corner, a Democrat win would almost certainly mean higher taxes for this income bracket. But this won't necessarily make much of a difference. For one, even if the Dems' proposed hikes pass, taxation still won't be at 1990s levels -- and the rich certainly didn't stop spending then.

And what's more, the anticipation of a tax increase could spur even more spending on luxury items in the short-term.

In other words, luxury spending might be able to keep pace with higher earnings, no matter what the electoral outcome.

That's not what some options traders are thinking. We created a universe of luxury stocks, and scanned the options market to find out what traders think of these names.

Surprisingly, most luxury stocks had Put/Call ratio above 1.0, meaning that there are more open put option contracts on these stocks than call option contracts (i.e., bearish options market sentiment).

That seems to be consistent with the projections of U.S. consultancy Bain & Co. The company predicts growth in the luxury sector will slow next year to 3%-5% after a 10% rebound in 2010.

Bain said it expected growth in the luxury sector to slow down as the basis for comparison became higher and currency fluctuations could hamper tourist flows.

Options traders seem to think that luxury spending is about to decline -- what do you think? Here is a list of seven luxury stocks with bearish options market sentiment. (Click here to access free, interactive tools to analyze these ideas.)

Options data sourced from Schaeffer's. The list has been sorted by the Put/Call ratio.

Luxury Company

Call Option Open Interest (No.  Contracts)

Put Option Open Interest (No.  Contracts)

Put/Call Ratio

Luxottica Group (NYSE: LUX)




Polo Ralph Lauren (NYSE: RL)




Nordstrom (NYSE: JWN)




Coach (NYSE: COH)




Saks (NYSE: SKS)




Phillips-Van Heusen (NYSE: PVH)




Tiffany & Co. (NYSE: TIF)




Interactive Chart: Press Play to see how analyst opinion has changed on all these stocks over the last two years.

Disclosure: Kapitall's Eben Esterhuizen and Alicia Sellitti do not own shares of any companies mentioned.

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