The Seductive Pull of the Early Cycle

We have to be realistic. While I don't believe this rally is chimerical -- it shouldn't be called a rally, as it has been a full-fledged bull market off the bottom -- I am confident that the next leg up will not stay up without definitive signs that things are actually getting better, not just staying flat. Like they are now. And we can't get a boom until we see what this economy will be like without federal help and with higher tax rates, and that's something that might be around the corner. Hence, the desire, at least for me in Action Alerts PLUS, to take advantage of what might be once-in-a-lifetime cheapness of growth stocks like PEP, ABT, CELG and Gilead Sciences (GILD - commentary - Cramer's Take), while they are hated.

Still, the charts can't all be lying. This market's got the most fabulous set of leaders that I can recall since bottoms in 1991 and 2003 (although tech can't be considered early-cycle, it can be considered post-depression rallying).

Maybe that's why it has proved to be so hard to contain. That and the fact that the shorts, which pressed all of these stocks into oblivion obviously with the help of no borrowing, are scrambling so hard.

I find it hard to go against RealMoney contributor Doug Kass, who has called this market so well. So I won't, and I am not committing a dime more into this market until we get a 3% to 5% pullback.

Somehow, though, I wonder what would cause it, and I presume it would have to be a General Motors (GM - commentary - Cramer's Take) bankruptcy, a Citigroup stress failure or some sort of oil shock because an explosion of terror or even war in the Middle East that an increasing number of people are talking about. (I don't think it is going to happen, but then again, nothing can be ruled out over there as a test of the new Obama administration.) As onerous as the coming cap-and-trade regime could be, brought on by the Environmental Protection Agency coming to its senses and becoming an important agency again, I don't think that will do it either as Congress has always, in the end, bucked the Nancy Pelosis and sided with the utilities because no representative wants to be the reason why electric rates are going higher.

So, I go with Doug. But I worry. And it isn't about the downside I worry about. It is about not having enough money in to stay ahead of the averages, as I have been. That's a bizarre worry after six straight up weeks, isn't it?

But it is also a testament to the power of this early-cycle rally and the wonder of an expansion beckoning, and not just a correction out of doom into something much less than boom because of the events of Lehman finally being put behind us.

At the time of publication, Cramer was long Abbott, Celgene, Gilead, General Mills, JPMorgan, Pepsi, Unilever and Yum! Brands.

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