What happened

After three straight days of huge gains, J.C. Penney (NYSE:JCP) shares were moving in the wrong direction today after a rally sparked by its launch of a men's outdoor apparel brand, a short squeeze, and a general rotation into value stocks came to an end.

As a result, J.C. Penney stock finished the day down 11.2%.

The entrance to a J.C. Penney department store.

Image source: J.C. Penney.

So what  

There was no direct news out on the company, but this has been a high-volume trading week for both Penney and retail stocks, in general. Today, two of its peers, Tailored Brands and Duluth Holdings, posted disappointing earnings reports, which may have pushed retail stocks down more broadly. The SPDR S&P Retail ETF (NYSEMKT:XRT) finished down 0.8% today, ending three straight days of strong gains, while the S&P 500 still finished up 0.3%.

As for J.C. Penney, day traders seem to have piled into the stock to take advantage of the recent volatility, as shares had jumped a whopping 62% over the first three days of the week. However, there were almost no fundamental changes driving that jump as the only meaningful news out of the company was its decision to launch the St. John's Bay Outdoor brand and open corresponding outdoor shops at 100 of its stores.

Now what 

Even with today's losses, the stock is still higher than it's been in nearly two months. However, all of this week's gains could easily disappear considering investor sentiment on the stock has seemed to flip.

Penney still faces a delisting threat from the New York Stock Exchange, a huge debt burden, declining sales, and mounting losses. Given those circumstances, there's not much of a reason to bet on a turnaround for the stock.