Sorry today's newsletter is getting out to you a little later than usual. I had to wait until the market closed before I could begin dissecting today's action... a testament to just how "down to the wire" things were on Wednesday. Annoyingly enough, traders decided to end the day by not making much of a decision - the indices are still trapped between a rock and a hard place. Remember how yesterday I told you the 20-day moving average was going to be the make-or-break line? Looks like the whole market was listening. The S&P 500 moved under that level for a while today, but when push came to shove at the end of the session, the bulls decided to make a stand. The VIX closed back under its 20-day moving average line too, validating my analysis from yesterday, but driving everybody nuts in the process. As for what to do now, the answer is simple... nothing. We have to wait and let this all play out, or more specifically, we have to give stocks more time to figure out which way they want to go. The good news is, the market's going to force everyone's hand real soon. We've talked about Bollinger bands before, so no need to preach that sermon again. We'll simply point out that the Dow ran into its lower 20-day Bollinger band today, around 15,420. That's also where the DJIA found a floor repeatedly in July, so we can say with some confidence that it's a big line in the sand. If the Dow Jones Industrial Average breaks under that floor, be afraid. Until that happens though, the bulls are still technically in charge. While I'm still in the 'correction' camp, I have to give credit where it's due - the bulls are putting up a very good fight. If stocks can consolidate long enough, they may be able to stave off a full-blown correction. We'll see. I'm looking for more (and better) clues on Thursday. The Rest of the Story Since we have the time and room today, I thought we'd use it as an opportunity to explain something I didn't get a chance to fully explain a few days ago - why we decided to boot J.C. Penney (JCP) from our mental portfolio back on August 1st. If you've been reading the newsletter for a while, you may recall we posted our official bullish stance on J.C. Penney back on April 9th... the day after hedge fund manager and major JCP shareholder Bill Ackman decided to fire CEO Ron Johnson after seventeen miserable months at the helm. Although the retailer still has problems galore, Johnson's exit took care of the biggest one, and the turnaround story could finally begin in earnest. After four months, however, we still hadn't seen any real evidence that the turnaround was getting started. Several more executives made their way out, and though old-school advertising and promotions were rekindled, revenue has yet to revive. The buzz is that sales for Q2 will be down between 5% and 10% when J.C. Penney unveils Q2 results on the 20th. Supporters will be quick to point out the new VP of marketing Debra Berman could be a game-changer. Honestly though, I just don't see what she can bring to the company of any real value. Her background was with Kraft (KRFT), as a brand-marketing vice president. Soft goods and home goods are a whole different ball of wax though. Besides, even if she does improve the quality and effectiveness of the marketing and advertising effort and draw more people to the stores - which would be a miracle in itself - the stores are still swimming in piles of the wrong merchandise. J.C. Penney dove headfirst into sexy labels like Joe Fresh, Izod, and Martha Stewart, and forgot how important socks and t-shirts were to the business. That problem is being addressed now, but it could take a year or more to cycle in the new stuff and cycle out the old. Problem is, J.C. Penney doesn't have that kind of time. See, the company is bleeding cash. The explanation was kind of fuzzy a couple of weeks ago, but Penney said it would have $1.5 billion in cash at the end of the second quarter. That's up from about $850 million it was sitting on as of the end of the first quarter, but bear in mind the company also raised $1.9 billion in Q2 through debt financing. Where'd the money go? If my back-of-the-envelope math is right, J.C. Penney burned more than a billion bucks last quarter. I know it takes time and money to turn a ship around, but I don't see how you spend a huge chunk of your bank account and not have a thing to show for it. I foresee another round of financing - either debt or equity - in the very near future just to keep the company liquid enough to pay bills, let alone turn things around. So far the market's given J.C. Penney the benefit of the doubt, but if the company has to come to the open market and ask for more money (which I believe it will have to do), investors are going to laugh in its face. That's one opinion anyway. I'd be curious to hear what you think about J.C. Penney here. Let's make JCP today's stock-rating focal point. Just go to the site right now and vote it as a buy or a sell. Better still, I'd like to hear what you have to say about the nation's most amazing riches-to-rags story we've seen in a while. You can write as much or as little as you want - I just know there's a big crowd out there that would love to hear your thoughts and opinions. Go there now. FYI, I'm aiming to get a new trading idea out to you by the end of this week. I can't guarantee it, as the market will need to cooperate. But, it's on the radar. Stay tuned.