Brokers Run and Leap Over Skeptics

Hung? Certainly possible. I'm talking about the shorts on the brokers. They don't know what to do. They don't know what to do because they got short expecting big declines on last week's estimate cuts, and we didn't get them.

Now what happens? Even if we do get them, what will happen is that they won't go down as much as they were before the cuts. That's been the pattern in the past.

Now it is true that there are genuine longer-term impairments to their businesses. But people are putting multiple to earnings and wondering what to do. Take Goldman (GS - commentary - Cramer's Take). If it keeps its 8.5 multiple and it earns $21, it won't go down much -- and that's the reduced number. What happens if Goldman got VOL right, meaning that it was long volatility -- how do we know they don't do more than $21? Can you afford to be short that?

Today's action has a lot to recommend about it. First, we were up huge in the second half of last week, and we've pushed higher still. Second, we really didn't have any deals beyond MetroPCS (PCS - commentary - Cramer's Take)-Leap Wireless (LEAP - commentary - Cramer's Take). But the most amazing thing is the run in the brokers, a group that I said earlier I wish we weren't so fixated about. Wouldn't you know it? I have never seen as few buys on the broker stocks since, well, 1998. When they bottomed last.

History repeating itself?

Sure seems like it.

At the time of publication, Cramer was long Goldman Sachs.

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