• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Consumer Discretionary

Cramer: Someone Has Created a Monster ETF

The top three stocks in the retail ETF mask declines everywhere else.
By JIM CRAMER
Jun 21, 2017 | 05:26 AM EDT
Stocks quotes in this article: RTH, AMZN, HD, LOW, CVS, WMT, BURL, TJX, ROST, JWN, PLCE, WFC

Eleven days ago, the retail ETF hit an all-time high. That's right, the VanEck Vectors Retail ETF (RTH) kissed $84, and even though its only down to $80, tell me that it doesn't feel like a worse bear market than the oil patch is enduring?

Of course, you can't feel it if you own the biggest player in the index, Amazon (AMZN) , at 20%. Nor can you tell it if you own numbers two and three in the index, Home Depot (HD) and Lowe's (LOW) . But the rest?

Carnage.

Now, in the silly little world that is ETFs, someone has created a monster here. The best trade in the world for the last 10 days has been to go long the three biggest in the index and then bang down everything else to set up a perfect play on what you see occurring in your screen.

That's right, with Amazon at 20% and Home Depot and Lowe's north of 5% -- the only ones higher than 5% besides CVS Health Corporation (CVS) -- you have an ideal long-short duo.

You do seriously have to wonder how Walmart (WMT) has a lower weighting than Amazon, Lowe's, Home Depot and CVS, don't you?

But don't get me started on that. What matters is that those top three have masked a decline of breathtaking proportions. I would say now that the vast majority of retail has entered some sort of rollover phase that I can't even recall, except during the darkest days of the great recession. It's as if people think that shopping is over, done, everywhere.

Now, I have been adamant that the Amazon move into food is the death knell for grocery margins. I am not backing away from that. I know that the mall stores are certainly challenged.

But now they are selling off the very stores that are the beneficiaries of the carnage -- Burlington (BURL) , The TJX Companies  (TJX)  -- which is a holding in the Action Alerts PLUS charity portfolio that I co-manage -- and Ross (ROST) . They are the ones who buy the merchandise from the companies with Amazon problems. They sell their merchandise under what Amazon can deliver!

Or how about Nordstrom (JWN) ? Just a few days ago, it was debating going private. I do not think that a press release about Amazon willing to accept the return of dresses should derail that deal. But now the stock is starting to roll over in a way that would say nothing's going to get done.

I think something will.

And now we are getting the breakdown of The Children's Place (PLCE) , which is the winner in the duopoly battle with Gymboree.

Right now, after the announcement of Amazon-Whole Foods (WFC) , I get that there is panic and fear everywhere. It can't be contained to just the grocery aisles.

But that said, I would keep in mind that there are winners and losers, not just winners. I articulated this position about Home Depot 10 days ago, when it was getting killed off of Amazon and it's had a great recovery.

I think we could be on the verge of a recovery on the other ones not in the crosshairs of the Seattle behemoth.

Unless you believe everyone is in the crosshairs. If that's the case, then go short the RTH and go long Amazon until the cows come home.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, is long TJX, WFC.

TAGS: Investing | U.S. Equity | Consumer Discretionary | Consumer Staples | ETFs | Funds | Markets | How-to | Jim Cramer | E-Commerce | Risk Management | Stocks

More from Consumer Discretionary

Logitech Could Decline Further From Here

Bruce Kamich
Jan 20, 2021 8:50 AM EST

A stock that declines in the face of what appears to be bullish news tells us something.

Boot Barn Gets a Quant Upgrade: Do the Charts Fit?

Bruce Kamich
Jan 19, 2021 1:53 PM EST

Here's our latest analysis and trading strategy for the shares.

Signet Jewelers May Retest the Breakout From Its Base Pattern

Bruce Kamich
Jan 15, 2021 8:09 AM EST

There is a risk of a pullback to the top of the base pattern or down to the $30 area.

Norwegian Cruise Lines Fights to Survive

Jonathan Heller
Jan 13, 2021 11:00 AM EST

The markets appear to be looking forward for the cruise industry.

Coca-Cola Could Turn Lower as the Bullish Fizz Is Escaping

Bruce Kamich
Jan 6, 2021 9:15 AM EST

Price momentum often weakens before a turn lower.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:01 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    I'll discuss price targets in my Saturday column.
  • 07:54 AM EST GARY BERMAN

    Friday Morning Fibocall for 1/22/2021

    SPX (Long-Term View) The 1/21/21 NEW high @ 3861...
  • 11:16 AM EST CHRIS VERSACE

    Worst Stocks to Buy for the Biden Presidency

    Biden's take on the minimum wage, likely moves on ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login