Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Liz Claiborne (NYSE: LIZ) shares leapt 17% as investors jumped for joy this morning, on news that the Juicy Couture maker lost $0.95 per share in Q2.

So what: "Huh? What? They lost money, and the stock went up?" Yes, you read that right. Liz lost $0.03 more than it did in last year's Q2, yet Wall Street responded with applause. Seems analysts are focusing on the firm's "adjusted loss from continuing operations," which wound up no larger than investors had feared (but at $0.34 per share, was still more than twice as bad as a year ago).

Now what: But count me out of the pep rally. Yes, I get that Liz beat expectations. I'm glad to see that gross margins gained 230 basis points, too. But getting down to brass tacks, this company still lost money in Q2. It's lost $279 million over the past 12 months. It's been losing money for nearly five years straight -- and this time, the company can't even point to positive free cash flow as a "yeah, but" excuse for its GAAP losses. Free cash flow for the past 12-month period now comes to a whopping $103 million.

Long story short, I'd rather short Liz Claiborne than go long.

Bears versus bulls -- who will carry the day? Add Liz Claiborne to your Watchlist and find out.

For the time being, Fool contributor Rich Smith does not either own (or short) shares of Liz Claiborne. The Motley Fool has a disclosure policy. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.