The market can be a confounding place.

Stocks rise and fall for so many different reasons, it's nearly impossible to predict exactly what will happen. Truly confounding is when a stock plummets on what would be interpreted by most to be good news. Case-in-point: Big Lots, Inc. (BIG).

Early yesterday, before the market opened, this well-known close-out retailer released earnings that easily beat Wall Street estimates that even included increases in forward guidance.

Time to cash-in that big ticket right? Maybe…not.

Behind Big Lot's Big Day

Here, we have a company performing just as expected, given the dismal economic conditions (see also, "A Healthy Dose of Reality"). BIG specializes in buying inventory that other retailers simply cannot sell. They then discount the items and sell them to buyers who can't get enough bargains–buyers struggling under the weight of job losses, income stagnation and price inflation BIG had a winning formula for success. Six months ago such a business model would have resulted in enthusiastic buying by investors. Indeed, that is what transpired with BIG.

In January of this year you could have...