The Health Care Quandary

Lots of funky stuff going on that's very hard to read.

First, the banks seem to have "had it": a move that's been made that can't get any better. Then there are the techs: they are hostage -- perhaps to Research In Motion (RIMM - commentary - Trade Now), perhaps to expiration. And oils? The oil/commodities peak is so in our faces that anyone who bucks it is bucking the most crowded area with the smallest exit.

Against it are the utilities and the drugs. Suddenly these nerds are so in front that we have to articulate whether it is recession or a change in the government's posture toward drugs and health care. I have said that I don't want to get in the way of Obama's plan for health care, but what happens if everyone doesn't want to get in the way of the drug and health care names? What happens if that's the least crowded trade?

It is why we have been furiously buying some biotech for Action Alerts PLUS but have not gotten to the point where we want to buy the expensive health care companies like St. Jude (STJ - commentary - Trade Now), Zimmer (ZMH - commentary - Trade Now), Medco (MHS - commentary - Trade Now) or CVS (CVS - commentary - Trade Now), even as they intrigue endlessly.

It's not cut and dry whether it is health care. We are looking at a huge move in Pepsico (PEP - commentary - Trade Now) and General Mills (GIS - commentary - Trade Now), which means rotation into the unloved such as Colgate-Palmolive (CL - commentary - Trade Now).

So we don't know if the health care rotation is simply out of commodities and economic plays like FedEx (FDX - commentary - Trade Now) and Freeport McMoRan (FCX - commentary - Trade Now) and into recession plays like General Mills and Pepsico; Obama relenting and accepting you can't change everything over night; or, amazingly if the whole thing is options-related and we have an artificial market entirely. My judgment: Out of the crowded into the uncrowded, which also happens to fit with the decline in the economy and where the money's going.

Random musings; Everyone's talking about Adobe's (ADBE - commentary - Trade Now) miss, but the stock is up for heaven's sake... Key stock Abbott (ABT - commentary - Trade Now) must hold here... Two names we like for Action Alerts PLUS are getting beaten down to the $12 strike -- General Electric and Bank of America (BAC - commentary - Trade Now), the latter being hurt by the conversion from preferred to common.

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At the time of publication, Cramer was long Abbott, General Electric, Bank of America, General Mills and Pepsico. 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.

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