WFMI and Why LR is still in cash

WFMI got slammed today. Down 11%. They nailed earnings but had a slight sales miss. And I mean slight: they missed by $20M or 1.4%.

Is this a sign of consumer spending slowdown or just over-aggressive expectations? I vote for the latter. I think that belt tightening is happening but not for the WFMI customer base. These are wealthier folks for whom higher gas prices are an annoyance but not a behavior changer.

Does the drop make WFMI a buy? I've said that I think WFMI is overvalued based on P/E. They are growing just over 20% in earnings and have a 49 P/E. I feel that that is still unreasonable.

This is a great company with a great future. I would like to buy it at a cheaper price. Something in the 30s is more reasonable to me.
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Last week the market surged 350 points. This week it is down 100 points so far. We remain in cash. Is that smart?

I look at the market as follows:
3 weeks ago Israel/Lebanon conflict starts. Dow was at 11,100
2 weeks ago Israel conflict really kicks off. Oil surges. Dow drops to 10,747
1 week ago Oil eases as the Lebanon/Israel conflict stays contained. Bernanke makes positive comments. Dow is at 11,051
Today Dow is at 11,100

In other words, the market sank and recovered on Israel/Lebanon and spillover issues. I don't think that we are on the way up. I do think that inflation fears and a likely rate hike will push the market down. So I am waiting for next week (the 8th) before moving. As always, it is something I review on a day-to-day basis.