Just as soon as Sears Holdings (NYSE: SHLD) re-arranged deck chairs on the Titanic, the retailer, headed by hedge-fund guru Eddie Lampert, reported another absolutely dismal quarter Thursday morning. In 2008, shares in Sears Holdings have sunk 36% as the retailer continued to report quarter after quarter of sluggish sales, declining revenue and underinvestment in its retail locations.

Lampert's idea of cutting investment in stores to boost actual investment returns has failed, and failed miserably. One thing customers respond to is constant change in their shopping environment, and this is where Sears has failed. Its stores look the exact same as they did four years ago. Even the logo has not changed.

Retailers like Target Corp. (NYSE: TGT) and Wal-Mart Stores, Inc. (NYSE: WMT) apparently know way better how to get seasonal and high-request goods to their stores. They do it in a fashion that turns inventory and makes sales far better than Sears' manages with its current grip on retail. In fact, I am not sure Sears even has a current grip of retail. It's a goldfish (albeit a large one) nearing the top of the fishbowl. With Lampert's track record, one would think he would have made changes a year ago. He has not, and Sears continues to flounder badly. The Wall Street Journal thinks Lampert should go, and go now. What do you think?

Even Lampert's acumen in taking out pieces of an investment and selling for a profit hasn't worked out. What about selling off a good portion of its real estate holdings under the combined Sears/KMart umbrella to help make a profit? Even that time has passed though. Lampert's original prediction for Sears Holdings has failed, and unfortunately he won't be adding this experiment to his resume that includes the years-ago notion that he was the next Warren Buffett.

Sears Holding (NASDAQ: SHLD) closed at $94.94 Wednesday.

SHLD is scheduled to release Q1 results on May 29.

SHLD June call option implied volatility is at 46, puts are at 56. SHLD average option implied volatility over the last 26-weeks average is 46 according to Track Data. SHLD puts are priced higher than calls because SHLD is difficult to borrow.

NASDAQ 100-QQQQ overall implied volatility at 24; 26-week average is 28.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Sprint Nextel (NYSE: S) operates a wireless and wireline network servicing 54 million customers, closed at $19.28.

• The Wall Street Journal reported that S board of directors started a search in August to replace current CEO Gary Forsee.
  
• Alex Brown says: "We continue to believe that any change in leadership at this point will lead to yet another year or more of attempting to turn the company around."
  
• S November option implied volatility of 39 is above its 26-week average of 31 according to Track Data, suggesting larger risk.

Sears Holding (NASDAQ: SHLD) closed at $141.40.

• The WSJ says: "Activist investor Ralph Whitworth "has reportedly taken a 5 million-share stake in SHLD, which would amount to 3.5% of the retailer's outstanding shares."
  
• SHLD November option implied volatility of 38 is above its 26-week average of 31 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

In The MarketWatch Options Trader, David Nassar takes a look at the Fed's recent actions, the outlook for the overall stock market and an options play on Sears Holdings (NASDAQ: SHLD).

He explains, "The Fed's infusion of liquidity seems to have turned the tide in favor of the bulls -- at least for now. However, lest one think that everything is 'go,' it is useful to note that 'V' bottoms in the broad market are very rare. "

Rather, he notes, it is much more typical for the first rally (i.e., the one we're having now) to eventually give way to another decline. Nassar states, "If that decline does not fall below the previous lows, then a bullish pattern can arise. This is the pattern of nearly every bottom in the last 20 years."

Therefore, he suggests, "While we respect the strength of the rally and realize that more Fed moves could result in higher prices short-term, we still think there is a reasonable chance that the closing Standard & Poor's 500 Index lows at 1407 or the intraday lows at 1370 will be retested sometime in the next few weeks."

Time-wise, he suggests, "Occasionally, these retests take longer (at the 2002 bottom, for example, the initial lows in July were retested in October -- and then again the following March). In between, strong rallies can erupt, but eventually it is the retesting mechanism that delineates the true bottom."

In the meantime, he sees upside potential in Sears Holding. He explains, "The stock has tentatively completed a bottoming formation, when it broke out over 140 yesterday."

For those familiar with options trading, he concludes, "While options are pretty expensive here, and earnings are due on August 30, we think this is reasonable speculation." The trading expert recommends the Sears Holding October 140 calls at a price of $10.80 or less. If bought, he counsels, stop yourself out on a close below $133.

Each day, Steven Halpern's TheStockAdvisors.com features the latest investment ideas and market commentary from the financial newsletter community.

Sears Holdings Corp. (NASDAQ: SHLD) released its first-quarter numbers and the results looked like a reason to celebrate as profits jumped up by 20%. Where did that 20% come from? How about insurance money from Sears locations damaged by 2005 hurricanes and an unrelated legal settlement? In other words, the boring business of retail in Kmart and Sears stores really did not contribute to success here. Surprised?

Net income for the quarter rose to $216 million from $180 million while sales fell 2.5% to $11.7 billion. Yawn. In addition, same-store sales for the quarter fell 3.9% on less demand for home appliances at Sears and slower sales of health and beauty products at Kmart. Since I'm sure many Americans buy health and beauty products at Kmart, I think I'm buying the home appliance sales slowdown in Sears stores more as a reason here. But could that alone have contributed to a 3.9% same-store sales decline?

With Sears Holdings being more of an investment house and clearinghouse for Eddie Lampert rather than a thriving retailer bent on increasing market share, these results aren't surprising. From my experience, Sears stores are mostly dirty locations with what seems like a 1980s-era merchandising mindset (not sure about Kmart -- someone want to chime in here?).

Same-store sales have fallen every quarter since Sears and Kmart combined in 2005 and they don't look to get any better soon. Let's see if Lampert is serious about actually spending money to improve the retailer's operations here. So far, zilch -- and it shows.

Kohl's -- the department store outside the mall -- released financial results for its third quarter yesterday. The chain reported third quarter earnings per share of $0.68, compared to $0.45 during the same period a year ago. Analysts estimated that Kohl's would earn $0.64, so the company blew past its expectations pretty nicely.

Revenue for Kohl's increased 16.6% to $3.6 billion from the year-ago quarter of $3.1 billion and quarterly same-store sales increased 8.5% as well. Kohl's raised its earnings guidance for its 2006 fiscal year from the range of $3.04 - $3.13 per share to between $3.16 and $3.24 per share.

With both retailers J.C. Penney (NYSE:JCP) and now Kohl's Corp. (NYSE:KSS) reporting better-than-expected results for their most recent quarters, where is competitor Sears Holdings (NYSE:SHLD) going to land? And what about discounter Target Stores (NYSE:TGT) that also faces increased competition from resurgent retailers like Kohl's, Sears and J.C. Penney?

Sears, best known in history for its catalogs, will be landing its results on the day of November 16 , next Thursday. Stay tuned as I'll be covering what Sears is up to. And, if the competition is any sign, Sears may have a decent quarter coming up next week.