This Day in Retail

As I mentioned back in September, overall this is probably going to be a crummy period for retailers as the "imaginary" inflation the Fed believes is not real bites them, and their favorite ATM (their house) becomes either harder to access due to more stringent mortgage requirements and/or they become upside down on their homes as the value drops below what they borrowed.

In that entry I broke down the stocks and categorized them by technical buckets - good, neutral, ugly, and Barry Bonds club (i.e. asterisk/too close to call/no clear trend)

So ahead of tomorrow's same stores sales a few companies reported today/tonight

Costco (COST) impressed (this was a full earnings report, not just same store sales) and the stock was up 9% today. Costco had placed in the 'good' category back in September from a technical perspective. (clearly above the 50 day moving average)

Zumiez (ZUMZ) just reported same store sales and impressed with a 13.9% SSS vs expectations of 6.6%. The stock is up nicely (+6%) after hours. Zumiez also placed in the 'good' category technically back in September.

Petsmart (PETM) pre-announced today and guided down 9% for 2007 and also took 2008 down a bit; also noting same store sales would likely miss. The stock was down 4% today. Petsmart had fallen into the 'Barry Bonds club' back in September, meaning it had rebounded post Fed but had fallen back quickly and was right around key support.

Men's Wearhouse (MW) also just pre-announced, lowering its 3rd quarter profit from 0.70-0.73 to 0.66 to 0.70. It's now down 5% after hours and this stock also fell into the 'Barry Bonds club'.

Most surprising was the American Eagle (AEO) miss; as the company was showing insider buying of late - must of seen traffic fall off lately ('blame warm weather'); same store sales down 2% versus analysts expectation of +1%; and a few pennies lower on quarter 3. The stock is only down 2% after hours though. Technically, back in September the stock was in the 'neutral' category in between the 50 and 200 day moving averages; without a clear trend above the 50 day it was not technically a name to get behind. Interestingly, a quick look at the chart shows the stock falling below both support lines in the past week, much like Coach (COH).

So once again in this "equal playing field" somehow the stocks that are disappointing, are especially weak ahead of PUBLIC disclosure of information. Hmmm, I wonder how that seems to always be the case. This is why having even some basic technical analysis in your toolbox is key. All 3 companies failing tonight had shown degrading technical signs, and weak(er) stocks before the peons in the public knew the bad news (guess who got the info between you and I?), whereas the 2 stocks that technically looked good, outperformed to the upside. Shocker eh? It's not foolproof but its amazing how often things play out this way.

Well tomorrow will be an interesting day. If the technicals have anything to say with it, stocks like Tiffany, Abercrombie, Blue Nile should be fine tomorrow as the stocks seem to be holding up ahead of news; and a lot of other names should be showing the "at long last" weakening US consumer (which some people have been calling to happen for 3-4 years).