|
|
 |
 |
 |
 |
 |
 |
|
|
|
|
|
|
|
|
● |
|
|
 |
| |
| |
 |
| |
|
| |
Friday, 06/13/08
Posted 06/15/08, 10:57
pm ET |
(Scroll down to see Jim's
comments below) |
|
| |
| |
|
Today's date:
Friday, 06/13/08 |
|
| |
Dow Jones: |
12,307 |
+
165 |
| |
NASDAQ: |
|
2,454 |
+ 50 |
| |
S&P 500: |
|
1,360 |
+ 13 |
| |
|
| |
|
| |
|
Opening Segment 1
Title: |
'Cramer's
Game Plan
For Next Week'
 |
|
. . . .
. |
|
Featured Stock(s): |
Wells Fargo (WFC)
JPMorgan (JPM)
Lehman Brothers
(LEH)
Research
In Motion (RIMM)
Salesforce.com (CRM)
Hewlett-Packard (HPQ)
Google (GOOG)
IBM (IBM)
Ingersoll-Rand (IR)
Emerson Electric (EMR)
Eaton Corp. (ETN)
Parker Hannifin (PH)
L-3 Communications Holdings
Inc. (LLL)
Owens Corning (OC)
Toll Brothers (TOL)
Costco (COST)
Wal-Mart (WMT*)
Jones Apparel (JNY)
VF Corp. (VFC)
See Opening Segment 2,
below...
|
|
|
After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC:
Let's start with next
week's game plan...
After a huge up day today,
I think we have to address
it head on. Now, one way
to address it head on is
to look at stock charts...
Now, I don't believe in
following the stock
charts, okay... What's
known in official
Wall Street jibberish as "technical analysis".... I
don't buy into most
technical jargon, or
subscribe to the idea that
a stock - because it's
gone through some line is
about to go like that - or
that a stock, because it's
going through this line is
about to go like that... I
don't subscribe to the
theory of the "head and
shoulders," where, if the
stock gets here, it starts
going down...whatever.
I just you know...the
charts?... That's
what they indicate stocks
should do, okay?... Which
is why, even though I have
de-bunked this just now
and threw out these three
and a half years of Mad
Money...it's funny that
the Game Plan for next
week is all about a tool
of technical
analysis...that's right...
We're going to use a tool
of technical analysis to
explain what happened
today a little bit, but
more important, how you
can make money next
week...and it's known as
the Standard & Poors'
proprietary oscillator.
I actually do subscribe to
a service from the
Standard & Poors, where I
get charts hand-delivered
to my door every
weekend... simply because
I actually like to look at
the pictures... the
pictures of how a stock's
doing... in order to
generate ideas for the
show and for
my charitable trust that I
run...I'm constantly
trying to generate ideas
for that.
Now, I don't put much
weight on the notion of
the "head and shoulders,"
okay... that's the chart
that's negative...or the
"cup and handle," which is
another one... This stuff
might as well be
astrology, entrails to
me...okay, as far as I'm
concerned. The idea that a
stock is a sale because
the charts are terrible...
meaning that the direction
of the stock has been
down, so it'll stay down
until it reaches what is
called support...a level
where it held before...no.
I think it's garbage...
I've always felt that
stocks tracked
companies...and if the
company's fortunes are
turning up or, if the
stock of a good company
has been taken down so low
that it's cheap, I don't
want to be talked out of
buying it, because it
looks like this, this,
this, this, this...
No...no. If a
company is doing well on
the stock...because that
might be a damaged stock,
but not damaged goods. But
there is one part of
technical analysis that I
have followed religiously
since 1987... and that's
the aforementioned S&P
Oscillator... [See the S&P
link for this
here>>]. The
oscillator is a measure of
how much selling or buying
pressure there is in the
market. Again, I
know that's a difficult
concept...bear with me.
When stocks are
equilibrium...meaning
they're probably not going
to go up or down that
much...the buying and
selling...really roughly
about the same at that
moment, the oscillator is
around zero, okay?
Alright here's the deal...
Most of the time, the
oscillator's... there's no
real edge of the line when
its at zero, that's the
axis... but, when there's
buying for multiple
days...you come in Monday,
Tuesday, Wednesday,
Thursday, Friday, and each
day it goes up, because
there's more buying than
selling, that moves stocks
up dramatically, the
oscillator flashes and
tells us that we are over
bought...meaning stocks
are out of equilibrium,
and there's too much
movement in that
direction...
Over the last three years,
when we hit +5... it's got
an axis... When we hit +5
on the oscillator, that
has always indicated that
it's a good opportunity to
ring the register... to take some
money off the table.
And that has always been
the case...I said in the
last three years
always...since 1986, with
very minor exceptions,
when we hit +5, you got a
go, okay? And I have
found the indicator to be
incredibly reliable, even
though it is technical.
Now the same is true the
other way... When there is
selling multiple days and
again, the axis is one to
five...it actually goes
down to ten, but five is
what matters here...when
there's selling for
multiple days that moves
stocks down dramatically,
taking us to -5 on the
oscillator, the opposite,
the mirror image of +5...
that's a flash of green...
you simply have to close
your eyes and buy, because
we are so oversold...
You have to buy even if
you think the world is
coming to an end...
you have to buy even if
everyone is saying, listen
it's over, except it isn't
over... And, while I know
that past performance is
not indicative of the
future, I have to believe
that the sun will come out
on Monday, maybe even
Tuesday.
Here's how the oscillator
ties into our game plan
for the week...
As of this morning, we hit
-6. That's even
below... that's like the
danger zone... If
you don't cover your
shorts, and you don't
start buying, you're going
get hurt. There's
been no time in the last
three years, not once,
that we didn't have a huge
rally after this
oscillator had fallen to
these levels.
Very simply, I believe
that it's time to buy,
buy, buy...
But buy what?...
For a trade into an
oversold condition, which
is what we're doing right
now...I like to buy the
most heavily beaten down
sectors...stocks like
Wells Fargo (WFC),
on the banking
side...where there is
dramatic insider buying...
Or
JPMorgan (JPM),
which has fallen a lot
since it's done it's
Bear Stearns (BSC)
deal... or virtually any
of the brokers still left
standing... excluding
Lehman Brothers
(LEH),
because I don't like to
buy when a CFO heads
out...as anyone who
watches the show for a
long time...even one as
over matched as Aaron
Cowling (?)... It was
always "In Fuld We
Trust"...Fuld being the
CEO... not "In
Cowling We Trust"...until
this year... Now, in LEH,
it's no one we
trust...alright?... But,
what you saw today, just
so you know...when we hit
-6, that's why we hit the
big rally today...it was
technical...technically
derived... nothing
good happened but we saw
we were up 166 because we
hit this level, alright.
Tech...I don't like
tech...but I'll go with
some new horsemen of
tech...Research
In Motion (RIMM),
Salesforce.com (CRM),
Hewlett-Packard (HPQ)...
I like the merger...
Google (GOOG)
and
IBM (IBM)...
they are going to bounce
off this.
How about "new tech?"...
which I actually do
like...
We saw the makings of a
rally in that today.
Ingersoll-Rand (IR),
Emerson Electric (EMR),
Eaton Corp. (ETN),
Parker Hannifin (PH)...
up two... I don't care.
How about defense?....
They're all down because
of fears that Obama will
go Gandhi on us... Nothing
could be further from the
truth...I think Obama is
on board...I think you
have to buy defense stocks
that have been
hammered...particularly L-3 Communications Holdings
Inc. (LLL)...
because they do a lot of
homeland security.
I'll even tell you to take
a stab at, yes, hold your
nose... but remember
that's what you do when
you're down here in the
oscillator...hold your
nose and buy some
homebuilders... or
homebuilding-related
entities... We had the CEO
of
Owens Corning (OC)...they
do insulation... of
course, also windmill
composite blades...and how
about this one?...
Toll Brothers (TOL)...you
know we like Bob Toll...
If the stock's under $20,
you gotta buy it.
How about retailers?...
They work too...
Costco (COST),
Wal-Mart (WMT*),
and the high-yielding
Jones Apparel (JNY),
which has made some good
moves of late, and should
soon be getting some
fantastic business from
WalMart. I think
VF Corp. (VFC)
works here too.
What not to buy as part of
our oversold rally?...
Well, I've got to tell
you... You don't buy
what's overbought when
you're oversold. And
the oil and gas plays,
which you know I
like...are going to come
in here...and that's your
chance to buy them...
Don't buy them now... Wait
until they get oversold,
including the wildcatters
and the majors.
The oscillator tells the
tale best for beating up
oversold stocks, and not
the overbought... which
will most likely be
ignored in this rally.
I'm not backing away from
the oil and gas
plays...I'm just pointing
out that next week may not
be their week. You saw
some of that today with a
lot of them in a big
up-160 day.
Why not buy them lower?
Why does the oscillator
work?... Because things
are generally never as
gloomy as people believe.
When the oscillator is
oversold and everyone
keeps selling...and it's
never as great as people
believe...because buyers
got too enthusiastic or
sellers too pessimistic...
See, it's really a
psychological
depiction...This is
greed... Everyone got too
greedy up here, so it goes
down... And this is
fear... everyone gets too
fearful here so it goes up
and goes back to
equilibrium, and that will
be all I ever talked about
technical analysis again.
. . . .
.
The Bottom Line!:
When the oscillator
signals either extreme, I
think you have to make a
move...and I believe the
move is now to buy, buy,
buy...the rally you saw
today is the beginning of
a multi-day rally...
You haven't missed a
thing.
. . . .
.
| |
|
| |
|
■ |
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) |
|

|
WFC |
26.08 |
na |
Wells Fargo (WFC)
|
|

|
JPM |
39.58 |
na |
JPMorgan (JPM)
|
|

|
LEH |
25.81 |
na |
Lehman Brothers
(LEH)
|
|

|
RIMM |
132.96 |
na |
Research
In Motion (RIMM)
|
|

|
CRM |
72.79 |
na |
Salesforce.com (CRM)
|
|

|
HPQ |
47.45 |
na |
Hewlett-Packard (HPQ)
|
|

|
GOOG |
571.51 |
na |
Google (GOOG)
|
|

|
IBM |
126.15 |
na |
IBM (IBM)
|
|

|
IR |
39.76 |
na |
Ingersoll-Rand (IR)
|
|

|
EMR |
55.92 |
na |
Emerson Electric (EMR)
|
|

|
ETN |
96.04 |
na |
Eaton Corp. (ETN)
|
|

|
PH |
78.67 |
na |
Parker Hannifin (PH)
|
|

|
LLL |
97.93 |
na |
L-3 Communications Holdings
Inc. (LLL)
|
|

|
OC |
23.93 |
na |
Owens Corning (OC)
|
|

|
TOL |
19.91 |
na |
Toll Brothers (TOL)
Price target to buy: Under
$20.00
|
|

|
COST |
70.32 |
na |
Costco (COST)
|
|

|
WMT* |
59.18 |
na |
Wal-Mart (WMT*)
|
|

|
JNY |
15.33 |
na |
Jones Apparel (JNY)
|
|

|
VFC |
72.78 |
na |
VF Corp. (VFC)
|
|
| | | | |