Oversold Is the Only Answer

Got to admit that I am confused by the action in Google (GOOG - commentary - Trade Now) and Caterpillar (CAT - commentary - Trade Now).

The endless parade of research notes claiming that Google's earnings will be sloppy or weak should have certainly led to a hammering right here. How can the stock be up on these reports? How can it be hanging in?

As for Caterpillar, Credit Suisse's (CS - commentary - Trade Now) call is about continued weakness with the inference that the dividend will have to be cut. That Caterpillar has not benefitted more from the Chinese stimulus and isn't seeing any turn at all should have sent the stock at least to the $30 strike. But it holds in like a champ.

This action is simply a function of this market remaining oversold. I have read Helene Meisler's advisement to not overstay this rally, but if this market were really dangerous these stocks should be dropping like stones.

I wonder if all the bad news is "in" CAT including a dividend cut. I am anxious to get back in at a lower price for Action Alerts PLUS.

I do not believe the Google weakness stories and think that it is still doing quite well. Doesn't matter, though -- in the vacuum these analysts should be controlling the buy and sell flow and they aren't. And the calls are way too expensive to play this one, which reports on July 16. They are really pumped.

Random musings: Apache's (APA - commentary - Trade Now) strength, Anadarko's (APC - commentary - Trade Now) refusal to go down and the incredible strength of National Oilwell Varco (NOV - commentary - Trade Now) are completely mystifying unless people are all piling into the thesis articulated by Rick Bensignor on Top Gun Trader.

At the time of publication, Cramer had no positions in the stocks mentioned.

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.