The Case for a Counterintuitive Rally

Wal-Mart (WMT - commentary - Cramer's Take) serves as a big umbrella for a lot of retailers. We now realize that the numbers from Costco (COST - commentary - Cramer's Take) and from, well, Wal-Mart before this, may be too downbeat. And those that have any success at all, like Urban Outfitters (URBN - commentary - Cramer's Take), Ross Stores (ROST - commentary - Cramer's Take) and TJX (TJX - commentary - Cramer's Take) -- as opposed to the dollar stores -- are getting a higher multiple on their somewhat consistent earnings.

Dollar Tree's (DLTR - commentary - Cramer's Take) a tough one because the trade-down theory is at work everywhere except, perhaps, at the ultimate trade-down. I wonder if it is execution, and I know that Family Dollar (FDO - commentary - Cramer's Take) has some margin improvement to come, so it might make a good buy down 2.

Now, we also see that Visa (V - commentary - Cramer's Take) and MasterCard (MA - commentary - Cramer's Take) -- two hedge fund faves -- are able to be generals for retail, even though those who know these companies understand these are secular plays on the switch from paper to plastic.

We also have something interesting happening in natural gas: the weather. Duke Energy (DUK - commentary - Cramer's Take) confirmed that more power is being used -- that's something that had become questionable with the slowdown, and it is being used to heat homes. Natural gas rallies could make a lot more stocks investible than we thought.

All of these "bullish" signs are being played out here, and that makes it so a rally can be developed counterintuitively, because Cisco's (CSCO - commentary - Cramer's Take) outlook was devastating and the "Break Bank of America (BACA - commentary - Cramer's Take) / Wells Fargo (WFC - commentary - Cramer's Take) / JPMorgan (JPM - commentary - Cramer's Take)" crowd is working its black magic...

At the time of publication, Cramer was long Wal-Mart, Cisco, Wells Fargo and JPMorgan.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.