Tuesday, May 5, 2009
(Cont'd from above)...

Jim (cont'd):   

You see, we've grown accustomed to disappointment in the food and drug businesses... every day... but, miraculously, today, we didn't get it. In fact, Kraft Foods Inc. (KFT) - widely perceived to be the absolute worst of all the food stocks - put up a terrific earnings report, reversing what had been a fabulous trend... and I shuddered, the moment it happened... because I knew the stock was going to reverse the market's direction... I shuddered, because this market has existed and thrived on a steady diet of selling Mac 'n Cheese, selling Philly Cream Cheese, selling Velveeta... selling Kraft!...

We can't afford to have a reversal of this money flow... out of KFT or Cramer-faves, General Mills (GIS*) and Pepsi (PEP*), which have been simply horrible, in the interest of full disclosure... and taking the cash from these stocks and buying Intel (INTC) and Microsoft (MSFT) and Exxon Mobil (XOM) and Transocean (RIG)... and Wells Fargo (WFC*) and JPMorgan (JPM*)... the leaders, all of which were down today...

Yep, once you get this chart... once you get the buying in Kraft... you know that this flow of funds could be reversing, just as surely as this chart of Cheez Whiz demonstrates...

You see, there isn't enough money to spare... It wasn't enough that a loser like Kraft broke out of its Oscar Meyer wiener-dog funk...

Guess what else happened!... Molson Coors (TAP) woke up...

Few groups have underperformed worse than this beverage group... and those close watchers of the show know that I was perturbed when I had the CEO of TAP on... Anyway, the CEO threw cold beer on my thesis that the stock could be ready to run... and yet, we got a strong number from Coors, and it seemed to carry over to Heinz (HNZ) and Campbell Soup (CPB)...

I simply think that TAP could stay up, into the close... I thought it would sell off, and the beer money would flow into the old leadership... but it didn't.

Once the staples broke out, the seemingly endless selling in the drug stocks came to a halt. We got actual upticks and rallies in Eli Lilly & Co. (LLY) and Johnson & Johnson (JNJ) and Bristol-Myers (BMY)... and Pfizer (PFE)... and even lowly-worm, Abbott Labs (ABT*)... another poor performer for my ActionAlertsPlus.com, my charitable trust... Get this... Celgene (CELG*)... still one more Trust name... went higher... I thought that stock could only rally in the event of nuclear war...

You could almost hear the liquid oxygen pouring out of the booster...

It gets worse...

The natural gas stocks have been pulling off a silent-but-deadly move against the bears for weeks on end... But, today, Morgan Stanley had enough, and pulled the plug on these incredible leaders in this amazing rally, downgrading Anadarko Petroleum (APC) and Devon Energy (DVN*)... I say, ouch!... Then the natural gas levitation act came to a crashing end... when Chesapeake Energy (CHK) reported a miserable quarter, which surprised only the people who thought the company wouldn't be paying tens of millions of dollars to CEO, Aubrey McClennan, if things were all that bad. They were... which could very well lead to an early enshrining of McClennan onto the Wall of Shame, for the single-most overpaid CEO in the world!... What a competition...

The action wasn't all contrary...

A bunch of number bumps for Research In Motion (RIMM)... You know Apple (AAPL) can't be contained... nor can Amazon.com (AMZN)... nor can Google (GOOG)... Late-day rallies on all of those stocks... plus the coppers and the coals... That gave us a nicer finish than we deserved. It's a tribute to the incredible strength of the market...

Tomorrow gets off on the right track, with a pretty darn good number from Disney (DIS), after the close... nothing Mickey Mouse about it... And, given that it's a Dow stock, well that could reverse a trend that found the venerable average down 16 points at the end of the day...

Gambler alert... Las Vegas Sands (LVS) blew away their numbers after the close too... Rocket fuel resumption alert? Maybe.

Here's the bottom line...

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The Bottom Line!:     I didn't like today. In the end, we need to see canines like Kraft (KFT) and Molson Coors (TAP) behave... We need to roll over... we need them to heel!... We need them "down, boy!"... if we are going to have a resumption of the rally. In a market recovery without broad based support from retail investors and hedge funds and mutual funds, we need the money pouring out of the companies that do well when the economy is bad... and pouring into our rocket ships... I can't complain about the overall performance of the market, but I derive no solace from these companies responsible for any of the strength today... I want a resumption, not of this (pointing to an upward trend chart made of Cheez Whiz)... but, of this line in Kraft (making a new downward line of Cheez Whiz)... which would most definitely mean a resumption of leadership and much higher prices in the rest of the market.

[verbatim recap]

[end of segment]

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