Don't Paint Everything With the Jobs Brush

Does unemployment trump everything? Does it trump Apple (AAPL - commentary - Trade Now) sales? Does it trump 3G and 4G? How about Chinese orders? How about General Mills' (GIS - commentary - Trade Now) numbers? Yum!'s (YUM - commentary - Trade Now) business? Does unemployment trump pending home sales? Or order pick-ups in autos and a subsequent bottom?

That's what you have to ask yourself when you sell today. You have to ask yourself whether 40,000 or 60,000 jobs trumps everything good that has happened. You have to ask yourself if the government were to take 100,000 of those people and give them jobs taking care of federal lands and parks or working at the post office or having them go into a conservation corps, whether we would be up and not down.

I point this out because perhaps we are letting one piece of data -- even though I submit it is the most significant piece of data -- overwhelm a worldwide recovery, albeit a slow one, and cause us to think that next stop is 6300 on the Dow.

We have become so binary as to be ridiculous.

Here's what I see happening: a slow recovery, one that doesn't produce a lot of jobs and a lot of spending but some decent profits because of the massive layoffs and the shuttering of facilities.

That's not a recipe for Dow 10,000, but it is also not a recipe for Dow 6300. It is more of a recipe for rangebound with perhaps the low end being the high 7000s and the high end being the high 8000s. No lower, because job growth will be nil without a second stimulus. No higher, because if we get a second stimulus -- which we need -- we will not be able to catch fire and instead will just smolder along.

Therefore I think it is easy to be bullish on the way down for defensives and high-yielders, as I am slightly less bullish on the way up to be in industrials and oils. In reality, a diversified portfolio gets you there with a little more cash than usual until the market goes toward Dow 8000.

At the time of publication, Cramer was long General Mills and Yum! Brands.

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