Retail sales for August had the biggest jump in five months. The Commerce Department reported that purchases were up 0.4 percent from July to August. Economists had expected a rise of 0.3 percent.
The surprise retail numbers spurred buying in Liz Claiborne (LIZ) and Pacific Sunwear (PSUN).
Notice that LIZ hit a high of $5.03 on the news, briefly crossing above the tough $5 resistance but was quickly met with profit talking. This is a great example of why you should never chase a stock. The swing move up began last Friday off $4.40. The stock is already up 13% going into today’s retail numbers announcement.
The market makers are screwing around with PSUN setting a gap open at $4.89 only to have professional traders fade the gap and send the price falling back down to $4.30
PSUN, like LIZ, had wicked headfakes on this morning’s retail sales, better than expected, news. Anyone buying into these retail stocks this morning was killed.
It’s a dangerous world out there today folks, be cautious and don’t chase.
The idea is to buy on rumor and sell on news. The slightly better than expected retail sales numbers were already priced into the market.