J.C. Penny Layoffs; India To Construct World’s Largest Solar Plant

Ulli Market Commentary Contact

Wed pic

[Chart courtesy of MarketWatch.com]

1. Moving The Markets

One of the biggest news items today was that J.C. Penny (JCP) announced (just after the market closed) it will be closing 33 stores and cutting 2,000 jobs. The cuts will essentially result in cost savings of about $65 million according to Chief Executive Mike Ullman. The stock was down 0.86% today and has continued to slide in after-hour trading. It will be interesting to see the markets reaction during Thursday’s normal trading hours.

In the tech world, most stocks gained today with notable attention being paid to Apple’s CEO Tim Cook reporting on the company’s partnership with China Mobile Ltd. Apple’s (AAPL) stock finished the day up 2%. Twitter (TWTR) and Microsoft (MSFT) also performed well today, closing at +5.8% and 2.7% respectively.

Today was a sunny day for solar in India as the Guggenheim Solar ETF (TAN) reached a new 52-week high early on in trading. The news that India is constructing the world’s largest solar plant entailed bullish sentiment from investors and the ETF is now trading about 2% higher than it was at the open of trading today. India has never been a major player in Solar and does not even have an indigenous solar industry.

Our 10 ETFs in the Spotlight joined the continued rebound with 5 of them now having moved into the plus column YTD.

2. ETFs in the Spotlight

In case you missed the announcement and description of this section, you can read it here again.

It features 10 broadly diversified ETFs from my HighVolume list as posted every Monday. Furthermore, they are screened for the lowest MaxDD% number meaning they have been showing better resistance to temporary sell offs than all others over the past year.

In other words, none of them ever triggered their 7.5% sell stop level during this time period, which included a variety of severe market pullbacks but no move into outright bear market territory.

Here are the 10 candidates:


All of them are in “buy” mode meaning their prices are above their respective long term trend lines by the percentage indicated (%M/A).

Now let’s look at the MaxDD% column and review the ETF with the lowest drawdown as an example. As you can see, that would be XLY with the lowest MaxDD% number of -5.73%, which occurred on 11/15/2012.

The sell off in the month of June 2013 did not affect XLY at all as its “worst” MaxDD% of -5.73% still stands since the November 2012 sell off.

A quick glance at the last column showing the date of occurrences confirms that five of these ETFs had their worst drawdown in November 2012, while the other five were affected by the June 2013 swoon, however, none of them dipped below their -7.5% sell stop.

Year to date, here’s how the above candidates have fared so far:


3. Domestic Trend Tracking Indexes (TTIs)

Our Trend Tracking Indexes (TTIs) resumed their upward trend and remain above their long term trend lines by the following percentages:

Domestic TTI: +4.35% (last close +4.18%)

International TTI: +7.34% (last close +7.02%)


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