Don't Let This Rally Fool You

Stocks are the tools to tell the tale, and last week made you want to own stock. The banks showed you they need not be wards of the state, GM (GM - commentary - Cramer's Take) acted as if didn't need to be a ward of the state and oil held its own. Drug companies, among the enterprises with the best balance sheets, decided to "give up" and combine in the face of diminishing returns courtesy of changes in governments worldwide, but particularly in the United States, that would impinge on long-term profitability.

Most important, the backtracking of Obama in his position toward business, something that would never be articulated but most surely occurred as the stock market was no longer ignored -- a Bill Clinton moment in a tone-deaf White house -- set a better tone for risk-taking.

This weekend we might have lost the oil prop with no cuts from OPEC. I expect a swift reaction down and a concomitant move down with so many stocks that make up the complex. We could also discover that the Bernanke thrust to moderate the mark-to-market rules to better reflect how portfolios truly stack up will be defeated by a recessive Tim Geithner, who seems as confused as ever about his role, even though his continually adhering acolytes champion his every plan no matter how much it changes. You take those two positives out of the equation, you lose the Chevrons (CVX - commentary - Cramer's Take) and the Exxons (XOM - commentary - Cramer's Take) and you give back the gains of Citigroup (C - commentary - Cramer's Take), Bank of America (BAC - commentary - Cramer's Take), JPMorgan Chase (JPM - commentary - Cramer's Take) and Wells Fargo (WFC - commentary - Cramer's Take), as more surely their bad assets are totally overwhelming their profits without forbearance.

In the larger picture we saw something else happen at the end of the week, a resurgence in the beaten-up consumer staples. That's not a good sign unless it is catch-up, because what we wanted to see was a pickup in the United States Steels (X - commentary - Cramer's Take) and in the 3Ms (MMM - commentary - Cramer's Take), of which I did not see a meaningful rally. The first was hobbled by covenant and pension worries, the latter by soft markets worldwide. You could insert Intel (INTC - commentary - Cramer's Take) or Microsoft (MSFT - commentary - Cramer's Take) or Dell (DELL - commentary - Cramer's Take) or Hewlett-Packard (HPQ - commentary - Cramer's Take) in that "suspect" rally camp.

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