Retailers Are Jumping

 | Aug 21, 2014 | 7:45 PM EDT
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Ross Stores (ROST)! The Fresh Market (TFM)! What the heck? There are companies out there reporting numbers that are making people jump up and down for joy that at one point wound have repulsed them.

But that's what happens when you have a roaring stock market with pockets of weakness that can be turned into strength.

Ross and Fresh Market beat their comp-store estimates by less than 0.3%. But that was enough. In this market, a comp beat is a comp beat, especially when the ones that didn't beat or guided down, like Macy's (M) and Lowe's (LOW), keep going higher anyway.

Now here's where it gets tough. These moves are gigantic. You are, per se, chasing these stocks now if you come in. You may even have sold them lower and realized that you need to own a retailer, and you have to go back to one you gave up on. Very embarrassing.

You are in the awkward position of hoping that Fed Chair Janet Yellen says or does something negative for the stock market so you can go buy a retailer with a 0.2 comp beat at "only" up $2 instead of $3.

I have seen markets like this before. They are markets where the real discipline is staying long, which is so hard after these big runs. An amazingly disciplined person is one who says, "I don't care where it has been, I care where it is going to," and goes right back in and buys Costco (COST), knowing it reported really great numbers when retail was unpopular, and if it put up those numbers tonight, it would be at $125 tomorrow morning.

Yep, it's real tough right now, because you probably think you are breaking discipline if you come in, and in reality you are showing that you can be unorthodox, which is often good at junctures like this.

Of course, you can compromise: Starbucks (SBUX) and Nike (NKE) haven't done much. You can take a flier that Wal-Mart (WMT) is oversold; I saw that all day. You can bet that the new guy at Target (TGT) can fix it while you take in the dividend. You can decide that all stocks that get to $90 go to $100, and you can buy some Home Depot (HD).

But the simple truth is that so many people right now are hoping that Yellen sticks her foot in her mouth so they can go buy something, anything, that's not up.

So she probably won't. 



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