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Friday, 05/02/08
Posted 05/03/08, 5:17
pm ET |
(Scroll down to see Jim's
comments below) |
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Today's date:
Friday, 05/02/08 |
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Dow Jones: |
13,058 |
+ 48 |
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NASDAQ: |
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2,477 |
- 3 |
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S&P 500: |
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1,414 |
+ 4 |
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Closing Segment 1
Title: |
'Cramer's Game Plan
For Next Week'
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Featured Stock(s): |
Tonight, Jim said to
simply watch the action
after these stocks report
next week:
Cleveland-Cliffs Inc. (CLF)
Anadarko Petroleum
(APC)
Fannie Mae (FNM)
Cisco
(CSCO)
Transocean Inc. (RIG)
(See comments below for
what to watch for...)
See Opening Segment 2,
below...
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After this segment, you
can see Jim's
SUDDEN:DEATH picks
here >>
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JJC:
Do you know what is the
driving force behind most
trading on a day-to-day
basis?
Do you know what controls
short-term performance of
the stock market of pretty
much everything?...
You do, if you read
Jim Cramer's Real Money: Sane Investing In An
Insane World... The
most important short term
force is what is called a
sector rotation...
From bulls to bears... and
vice-versa... That's
the subject for tonight's
Game Plan for next week...
When I say rotation, I
mean the big money
managers, who pretty much
use all the same play
book, judge events the
same way, and turn bearish
on one group, and turn
bullish on another,
causing big moves down in
what they're selling, and
up in what they're buying,
because these guys are
dealing with huge sums of
money. They're gigantic,
lumbering beasts...
they're slow... When you
get ahead of a rotation
you could make a lot of
money, because you're much
more nimble than they are.
You are able to buy the
stocks they are rotating
into before they have done
their enormous purchasing,
and you can sell the
stocks before they're
finished destroying
stocks.
Remember though, you can
also get hurt, as we have
learned with the vicious
rotation of industrial
commodities (sell, sell,
sell) - including ag and
oil - and into tech,
financials (buy buy buy)
and retail (buy buy
buy)...
Now, call me skeptical
about this rotation.
I think that the big money
guys now have the wrong
idea. I really can't think
of that much positive to
say about the financials,
other than they're not as
bad as they were a couple
of months ago...and
Fidelity's Magellan fund
owns them. Harry Lang, the
manager there, is really
smart and he has a lot of
firepower. And he, by the
way, defines sector
rotation. Whatever he
moves into, is going to
move the group, and he's
been buying financials...
So if you invest in the
financials, it's because
you're feeling a little
more comfortable, because
maybe their bad loans are
getting better. I can
understand that a little
bit.
Now, the strength in
retail, no... that's all
short term. It's the
combination of $600 iPod
in every pocket, chicken
in every pot, stimulus
rebate, and maybe some
good weather.
I wouldn't own retail...
I'd only rent these stocks
and sell them into the
strength. Actually,
we got a lot of strength
this week, I'd start
selling them next week,
because we got gasoline
prices up...and you know,
all week, we've been
talking with the food
companies... Not a
single one has said
anything other than prices
are moving higher.
So I'm not moving into
retail... People are
spending too much at the
pump, and at the
supermarket.
As for tech, I just threw
that whole sector in the
Sell Block yesterday
except for
Apple (AAPL)...
. . . .
.
I think this rotation
isn't for real...
And that means, if I'm
right, we're gonna get
another rotation right
back into the old groups,
and you saw some of that
today... with the
industrials and
commodities...
agriculture... some of
that was because of
Agrium (AGU)...
and I think oil and gas
will coming roaring back.
You saw some of that
today, as the futures for
oil went up... and I think
the financials and retails
will stall.
Let's not take any
chances. Let's find out
how I'm right or wrong. We
need evidence... we
look at evidence... which
right now means certain
stocks that report next
week...
On Monday, first clue...
after the close...
Cleveland-Cliffs Inc. (CLF)...
they report.
This is the largest
independent producer of
iron which you need to
make steel. It's been a
take over candidate
forever and has fabulous
earnings and it's up 125%
year over year... up 93%,
since I recommended it in
May of last year.
If CLF goes up after it
reports, then the rotation
could be over right then
and there, and people
could go right back to the
smock stackers.
. . . .
.
We've also got
Anadarko Petroleum
(APC)...
Now, this stock got
clipped badly yesterday,
when
Apache Corp. (APA)
dropped 8 points on its
so-called bad report. I
went over that quarter,
APA had a great quarter,
but people immediately
started saying eulogies
for the year of natural
gas... I think those
people are wrong.
I think natural gas still
works, and I predict APC's
numbers will be good and
the money will rotate back
into natural gas.
. . . .
.
Tuesday is a big litmus
day...
Fannie Mae (FNM)
and
Cisco
(CSCO)
both report, and these are
critical if we're going to
keep the rotation from
earlier in the week alive.
Remember, though, the last
time CSCO reported, it
killed the tech rally with
its miserable guidance.
The CEO, Chamberlain,
could kill the rotation
into tech single-handedly,
given that CSCO is one of
biggest tech names out
there.
FNM, another tighten in
the financial sector, is
the publicly-traded way to
get out of the housing
morass... It's
losing money and it needs
capital. It is up ten
points, or about 50%,
since Baron's questioned
its solvency two months
ago... bad call...
FNM needs to have a
smaller loss when it
reports and do an equity
financing to sustain the
rotation in the
financials. So you
look for that clue...
. . . .
.
And then, on Wednesday,
we're going to hear from
Transocean Inc. (RIG),
long my favorite
deep-water driller and the
largest off shore driller
in the world...
You will quite simply not
get a rally in this group
without a great number
from RIG. In other words,
if the money is still
trying to slosh around,
figuring out which way to
go, RIG will tell you
where it's going.
By that point on
Wednesday, when RIG
reports, you'll know
whether the rotation this
week was real or phony...
you'll have the facts.
This rotation from the
industrials and
commodities, into
financial, retail and tech
will either be proven
right or wrong by these
companies' reports when
they get their earnings.
. . . .
.
The Bottom Line!:
I am betting this rotation
into those groups is
wrong. But do
what I do... Don't
jump to
conclusions...ferret out
the clues, and then make
your moves.
. . . .
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■ |
Stock Snapshots - Includes
all stocks mentioned above |
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Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
|
na
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na |
na |
na |
Tonight, Jim said to
simply watch the action after
these stocks report next week:
Cleveland-Cliffs Inc. (CLF)
Anadarko Petroleum
(APC)
Fannie Mae (FNM)
Cisco
(CSCO)
Transocean Inc. (RIG)
(See comments above for what to
watch for...)
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See all of tonight's stocks'
latest quotes on
Yahoo! Finance |
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Most popular
investing books ordered:
(click any book to see at
Amazon.com) |
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Final Segment
2 Title: |
'Mad Mail'... |
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. . . .
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Featured
Stock(s): |
See comments below... |
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After this segment, you
can see Jim's
Sudden:Death picks
here... |
. . . .
.
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■ |
Stock Snapshots - Includes
all stocks mentioned above |
■ |
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| |
|
|
Jim
Cramer's
rating on
this stock |
STOCK
SYMBOL |
Closing
price
that
day |
Opening
price
next
day |
Full Company
Name/Comments
(see comments above for
each) |
|
 |
na |
na |
na |
Mad Mail
No specific
stock picks.
Ethanol-related
comments...
Q:
Thanks
for all you do.
You've given us
such famous
lists as the
"Four Horsemen
of Tech" and the
"Wall of Shame"
- now I have a
suggestion for a
new one. After
seeing the CEO
of
Tyson Foods (TSN)
on your show
yesterday, and
the CEO or
Anadarko Petroleum
(APC)
recently, it
made me think of
something - the
list I'm
proposing is the
"Wall of Ethanol
Truth". Start
with these two
CEOs, and add to
it as more brave
CEOs speak up
against this
enemy of the
people that is
ethanol. Maybe
if the "Wall of
Ethanol Truth"
gains some
steam, congress
will finally pay
attention and
act responsibly.
JJC:
Do you know
that, if we were
to eliminate the
ethanol mandate,
within three
weeks, Americans
would be able to
spend a lot more
on other things,
and not on food,
because food
would come down
so much. It's so
obvious...
Sometimes I wish
I were
president, just
to get rid of
the ethanol
mandate... That
issue is killing
Americans. And
the fact is, as
Mr. Bond (CEO of
TSN) said
yesterday, we
have been wiping
out starvation
for years...
Suddenly,
starvation is
back, because we
want to have a
lot of oil. It's
killing
everybody.
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