Friday, 05/02/08
Posted 05/03/08,  5:17 pm ET

(Scroll down to see Jim's comments below)

 
 
Today's date:  Friday, 05/02/08

  Dow Jones: 13,058   + 48
  NASDAQ:   2,477    -  3
  S&P 500:   1,414    + 4
 
 
 
 
 
First Segment
 
 
Closing Segment 1 Title: 'Cramer's Game Plan
  For Next Week'

.  .  .  .  .

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...
 
After this segment, you can see Jim's SUDDEN:DEATH picks here >>


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.

.  .  .  .  .

 

   
 

Stock Snapshots - Includes all stocks mentioned above

 

 

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

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...)


       

 

 

 



See all of tonight's stocks' latest quotes on Yahoo! Finance



Most popular
investing books ordered:
(click any book to see at Amazon.com)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 

 

 

 


  We need your help! 
If you find our service valuable, your donation is critically helpful to support
our operating costs and is MUCH appreciated!
(click below to donate)

We are serving thousands of new visitors every day and our costs are growing as well.  Thank you for your support & generosity!


 

 

 

 
 
 
 
Second Segment
 
 
Final Segment 2 Title: 'Mad Mail'...

.  .  .  .  .

Featured Stock(s): See comments below...
 
After this segment, you can see Jim's Sudden:Death picks here...

.  .  .  .  .

 

   
 

Stock Snapshots - Includes all stocks mentioned above

 

 

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.

 

     
 
 

 

[ end of final segment ]

   
 

Go to the SUDDEN:DEATH SEGMENT from tonight's show here >>

See current quotes on Yahoo! Finance from tonight's show stocks here >>


Netflix, Inc.


Symbol keys:

A Charitable Trust stock. - An asterisk next to a stock symbol indicates that Jim mentioned it is a stock that he manages within
his charitable trust portfolio.  You can see the complete portfolio
of stocks here >>

Thumbs up - indicates he would buy the stock or, at the very least, not sell the stock.  We do our best to interpret Jim's opinion on stocks, as we think it is indicated by his comments during the show.  Please read his comments to decide for yourself.

Thumbs down - indicates he has said not to buy or to sell the stock, based on his comments  We do our best to interpret Jim's opinion on stocks, as we think it is indicated by his comments during the show.  Please read his comments to decide for yourself.

Back up the truck - indicated by Jim, when he says the stock is so good, that he would do a 'mon-back' on the stock... In other words, this is the sound someone would say to a truck driver, "Come on back... " as he is "backing up the truck" to load up on his cargo.  Translation for buying stocks:  This recommendation by Jim indicates that, after you do your own homework on the stock, you should feel comfortable loading up on it, as it is in a good position to be bought at this point.

Stumped. - Of the 2,000+ stocks that Jim Cramer has in his head, for which he has an informed opinion, he sometimes comes across a caller with a stock he does not know well enough to opine on...  He then indicates he is stumped and will have to come back to it, after he does some homework of his own on the stock.  This usually occurs during the Lightning Round, when Jim does not know in advance who is calling, or what their stock question is about.
 

 
Definitions of key phrases used by Jim, known as "Cramerisms":

Definition:   'Pull the trigger' is Jim's phrase for making the decision at that point to trade - either to 'buy' or to 'sell' (although he usually uses the phrase for buying), as if to say you should feel comfortable enough to make the final decision without looking back...

Definition:   'Ring the Register' is Jim's phrase for selling a stock, and making it a final sale, that you should not look back on.  Put it behind you.

Definition:  'Let It Come In' indicates how you may wait for it to pull back, or have the stock price come down briefly, as your chance (after letting it come in) to buy the rest of your position (i.e., total number of shares you own in that stock).

Definition:  'backing it up' or 'doing a 'mon-back' is Jim's phrase for the metaphor of backing up a truck to load up on a stock by buying it.  'Mon-back is short for the imaginary worker saying, 'Come on back...' as the truck is backing up to receive its load... Notice that we use the little truck icon to indicate where Jim has mentioned this.  Translation for buying stocks:  This recommendation by Jim indicates that, after you do your own homework on the stock, you should feel comfortable loading up on it, as it is in a good position to be bought at this point.
  See more "Cramerisms" & other financial phrases here >>
   
Helpful Websites:
  See the stocks currently known to be in Jim Cramer's
Charitable Trust at:

jim-cramer-charitable-trust-stocks.com

 
See the stocks currently known to be in Warren Buffett's portfolio
of stocks at:

warren-buffett-portfolio.com

 
  Stock Homework 101:   This is an excellent upcoming site that provides resources and links to help you do that homework that Jim Cramer recommends after hearing his suggestions...

StockHomework101.com

This site is coming soon.   Thank you.

 
  FastMoneyRecap:   This site will be a quick summary of recommendations made by the great Fast Money TV show crew, that will offer you a unique service, to compare their picks to Jim Cramer's past comments about those stocks.

Fast Money Recap - Trades for next day...

Compare these picks to Jim's comments for the same stocks.

 

 

   
   
  © 2005-2007 MadMoneyRecap.com ■ Important disclaimer: This site is not affiliated with Mr. James Cramer, and is not associated with any television networks or broadcasts. Please note that all thumbs up or thumbs down indicators are not always clearly indicated on the show and are interpreted by us as accurately as possible. Some comments have been edited for brevity and clarity, and extraneous material omitted.  Please rely on watching the show yourself, doing your own homework, and reading the text of the comments to draw your own conclusions. Also, data presented on this site should not be used to make investment decisions and accuracy, although attempted, cannot be guaranteed.  Please consult with your own financial advisor for professional advice.
 
 

 

 
       

Feedback   ■   Terms of use   ■   Privacy Policy  ■   Keep this site Free