First Segment

 

 

Opening Segment 1 Title: 'Cramer's Game Plan   For Next Week' .  .  .  .  . Featured Stock(s): Wal-Mart Stores Inc. (WMT) Union Pacific Corp. (UNP) Burlington Northern Santa Fe Corp. (BNI) Norfolk Southern Corp. (NSC) CSX Corp. (CSX) J. C. Penney (JCP) NYSE Euronext (NYX*) Microsoft (MSFT) See Opening Segment 2, below...

        
JJC:  If you want to make money trading in this market, there's one thing you need to know... Notice I said trading... meaning we're talking about quick short-term gains...  not investing.  Which, contrary to virtually everything written about this show, or will ever be written about this show, because it's Cramer... is Mad Money's bread and butter...

What is it?...

You have to know that the move in the most downtrodden sectors... retail, the banks, the homebuilders... trumps everything.

When it comes to the market's new leaders, companies don't matter at this point in the cycle.  These companies are all doing really poorly...  It doesn't matter.

Some of them would be bad businesses, even if the economy was en fuego (i.e., really hot, on fire)...

Right now, that doesn't matter...

You probably think rationality doesn't matter.  And that's the core of my Game Plan for this market...

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This move is so powerful, so palpable... so intriguing...  to those who have been around long enough... that it is forcing me to grant clemency to Lee Scott, the CEO of Wal-Mart (WMT).  And, until today, a member in bad standing of the Wall of Shame... which is where we put the absolute most worst, most incompetent, most clueless CEOs...   These are chief executives who, by their own presence, destroy value...

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Lee Scott's as bad as they are, but I've got to remove him today (from the Wall of Shame), because it just doesn't matter...  it doesn't make any difference.   People shop at Wal-Mart when times get tough.  I believe that Wal-Mart (WMT) is going higher, perhaps much higher... 

You know what I think?...  You could put... oh man, and this is a statement...  You could put one of those Celebrity Apprentice (Donald Trump's TV show) castoffs in charge of WMT right now, and it wouldn't stop it.  That's how powerful this move is...

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Even the shock of a much weaker-than-expected employment number today couldn't stop it.  That number let us know that the Fed is still behind the curve, even after 1.25% of cuts in two weeks.

How could these guys not have known that we were heading into a slowdown this big?  How could they not have known that the employment would... well, just fall off a cliff?...

But, you know what?  It doesn't matter.  Let me tell you why...

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I have never seen a more potently-bullish combination of a panicked Federal Reserve - with a chairman who is terrified that he'll be sent back to reside over a Princeton eating club, if he doesn't lower rates fast enough... a desperate Republican party, that's sick of President Bush telling us about how sound the fundamentals are... and raving bunch of Democrats, who want to put an iPod in every pocket, and a chainsaw in every garage...

Money that had been parked in cash is now flooding into stocks, because dramatically-lowered interest rates will give people an excuse to get out and buy stocks.  Buy, buy, buy!

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They buy the market... they buy the S&P 500 Index Funds... they buy individual stocks... which explains why this rally is so darned broad-based...

But the point is, in addition to what the cuts will do for businesses, they also lead to more money in stocks... which sends everything higher, and is totally turbo-charging this move.

That's why the market just won't quit, no matter how poorly actual companies are doing...

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If you look at stocks that have reported shortfalls, they're screaming higher...

Freeport-McMoRan (FCX*) is up 20 points, since its shortfall...

McDonald's (MCD*) is up 4 points, since its shortfall...

CVS Caremark Corp. (CVS*) is up almost 5 points, since its shortfall...

You would think a shortfall meant something good...  but the truth is, this move is too strong and too big to notice this little stuff.

I know, because this has happened before.  I can quote you, chapter and verse, how the retailers ramp, everytime the Fed panics...

You just heard me endorse WMT...  

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So many stocks are working so well here.  I mean, think about it... TJX (TJX)...  Hey, how about Carl Icahn liking J. C. Penney (JCP), after everyone said, let's short it, because Cramer recommended it?...  Carl Icahn's smart.  He knows that J.C. Penney sells more than just Venetian blinds...

But how about these other companies that are supposed to go down in a recession?...

I mean, rails... rails...  The rail stocks!...

There's a coal shortage worldwide... a grain shortage...  and, when you hear that, you need to think Union Pacific Corp. (UNP), Burlington Northern Santa Fe Corp. (BNI), Norfolk Southern Corp. (NSC) and CSX Corp. (CSX).   [See more of Jim's comments about the increasing demand for coal and the predicted uptick in demand to get it to the ports for shipping to China and others, from today's Stop Trading segment here... ]

These happy oligopolists don't have enough cars to ship the stuff...

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Agriculture...

I know there's supposed to be a worldwide slowdown.  But that's because food costs too much, and we've decided to mandate those high prices for our love for ethanol...

Not a single politician has yet called for an end to this madness...

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But nothing is like the banks...  nothing is like this group that is so hated and shorted by all the so-called smart money... nothing.

Ever since our stress index bottomed, these stocks have gone up almost every single day.

Take Capital One (COF)... yeah, the credit card company.  They loan at a huge interest rate on their credit cards.  Their defaults aren't rising nearly as badly as I thought they would... and the price that they have to pay for the money they lend you?...  It's been coming down.

Well, that's deposit base, right...  That's fantastic.  That's the best of all possible worlds.  No wonder the company raised its dividend and boosted its buyback this week, when everyone thought it would slash its dividend and stop its buyback...

[Ed. note:  Jim knows the COF stock very well, as it was, until recently, held in his charitable trust and he may possibly buy it back...but that is only our speculation.]

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You even get a continuation of a rally in... oh man, hold your nose... Citigroup (C*), Merrill Lynch (MER), Washington Mutual (WM)... perhaps the biggest beneficiaries of the plan that people have been working on behind the scenes - and my plan frankly - to bail out the insurance arms of the Ambac (ABK)'s and the MBIA (MBI)'s...  I believe the plan will work... these stocks will go higher...

Now, if you want my pick on the best trade, on all this activity next week, and it's active...  I think it could be, yes, NYSE Euronext (NYX*), a company that's on fire, with a stock that seems as flammable as asbestos, and just as toxic...

If it's still at this price on Monday, I'd buy it, because it reports on Tuesday...  Unlike the old days, when the CEOs chose not to be on the call... Duncan Niederauer (CEO of NYX*) will be on the case, and he knows how to tell the tale...

And, while I'm at it... I would buy Mister Softee (i.e., Microsoft (MSFT), if it goes below $30.   

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The Bottom Line!:     For now, I think you have to trust the playbook, trust the strength of this move.  These stocks are very strong, even when the companies aren't.  And take Wal-Mart (WMT) to $55...

[See Jim's 2nd Opening Segment stock picks below... ]