The Monday after Thanksgiving, sales racks are a mess and retail stocks are on the move.

With volume still on the low end, this year promises another round of ups and downs. "I expect [stocks] to be very volatile," says Thomas Weisel analyst Liz Dunn. "For most of the year, the stocks have been driven by expense control and SG&A control and gross margin improvement. I think that s taken stocks this far, but at this point, investors really want to see improving sales trends."

One concern is that expectations among retailers may have gotten too high. That was the case last year, when trends started out promising, but traders ultimately turned sour on retail firms. In a Monday selloff, retail giant Wal-Mart (WMT) lost 5.1%. And Macy's (M) and JCPenney (JCP) lost 13.6% and 12.8%, respectively.

In 2007, retail stocks showed a similar trend. The sector was broadly on the Friday after the holiday but gave up ground on the first Monday back. That year, Nordstrom (JWN) picked up 2.2% in the abbreviated Friday session after Thanksgiving, but gave back 2.3% the following Monday. Coach (COH) picked up 3.1% that Friday, only to lose 3.1% Monday.

At Macy s, in particular, the Monday after Thanksgiving has become an increasingly popular time to sell. The department store has finished the Monday session after Thanksgiving in the red each year since 2004. In 2007 and 2008, the drops were 6% and 13.6%, respectively.

Of course, what happens on Monday is a reaction to what happened on Black Friday, which has increasing significance to the retail world and beyond. Retailers' results for those days aren't merely an indicator of their fourth-quarter results; they have a legitimate effect on them. Shopping has been polarized between Black Friday and shortly before the December holidays, as consumers flock to door buster promotions and late discounts, says Dunn.

This year, the consensus is that it will be a late-breaking holiday, so we might not necessarily see strong trends for Black Friday, says Dunn. Over the last few years, last-minute shopping has been on the rise, taming the significance of Black Friday.

We ve seen consumers hitting closer to the time the holiday is, closer to the time of whatever the event might be, says Kimberly Picciola, a senior equity analyst at Morningstar. Consumers are going to be looking for deals, and retailers are going to try to wait for the big markdowns toward the end. This year, companies have thinned their inventories, and many aren t planning to resort to the deep price cuts seen during last year s holiday season.

I definitely think there s going to be more rational discounting this year than last, says Dunn. That will likely impact sales trends. They re planning less promotion, their inventories are much leaner. So you re not going to see the 70% and 80% off hopefully -- that you saw last year, so we ll see how the consumer reacts to that.

The consumer is still very value-conscious, but there s an awareness that the recovery is underway, says Dunn. Consumers are also aware that there s less inventory and may shop early to avoid sellouts. That could offer upside.

Either way, there will be a lot of data on the table for investors the week after Thanksgiving. There will be data from credit-card companies, the International Council of Shopping Centers, and most notably, retailers' own receipts.

Those retail data, which are scheduled to be released Thursday, Dec. 3, are likely to make for a volatile end to the week. Few traders know exactly what to expect. All in all, the commentary coming out of retailers for November hasn t been robust, Dunn says. And a number stores have talked about a slowdown. They don t have a lot of insight into how the month will play out, she says. They will be waiting until the last two days of the retail calendar month to figure out where they come out.

The high end seems to be coming back, says Dunn, adding that when those retailers pulled back last year, it was fear-based response.

As a group, high-end retailers recently notched an upgrade from Goldman Sachs analysts. This is in part because of steep inventory reductions. Take Saks (SKS), for example. "They really have reduced inventory significantly, and I think that s helping them to some extent to drive more sales of full-priced items," says Picciola "If consumers want that item, they re going to have to get it early in the event that it might not be there for the end of season. So they re just in a different position."

The greater downside risk might be for some of the discretionary names that haven t been faring as well. For instance, Macy s, which has been more discretionary and is not really value oriented, as opposed to a Kohl s (KSS) or Target (TGT) or a JCPenney s, says Picciola. There is some risk there if they don t have the value proposition right, it could be a difficult fourth quarter for them.

That s true for everybody, she says. Consumers are still very focused on value, and it s going to be about having the right price and the right product in your stores.

Companies that are purposely pulling back promotions may also show weakness, Dunn says. All companies will be in a position where there will be less promotion pressure, but some are taking it a step further and saying we re going to purposefully limit promotion, but the bottom line impact will be positive . They re firm in the strategy that it s the appropriate thing to pull back on promotions, but we ll see how the consumer votes.

Coach and JC Penney have talked publicly about pulling back on promotions.

But overall, companies will use Black Friday as a measure of what s selling and what's not. It gives individual retailers a sense of where they stand and it gives them the ability to tweak merchandise and pricing, and they have a better sense of what s coming out and what they re focused on, Picciola says.

At that point, the strategy is usually pretty simple. If you have a bad weekend after Thanksgiving, you have to think about discounting more heavily, says Dunn.