Don't Overlook This Whirlpool Clue

Some stock rallies are not idle. Take the endless one in Whirlpool (WHR - commentary - Trade Now). I am always hard-pressed to find a more pure play in residential spending than Whirlpool. It is the perfect tell, much the way that FedEx is the perfect tell for international trade.

I mean, who the heck needs to buy a washer or dryer if they can put it off? What homebuilders out there buying up this stuff if they aren't building houses? If people aren't refinancing, how can they afford these $500 purchases? And don't tell me it is all Brazil, where Whirlpool intelligently kept an operation everyone thought they should have gotten rid of years ago.

Sure, Masco (MAS - commentary - Trade Now) and Fortune Brands (FO - commentary - Trade Now) are fairly pure plays. But Masco's balance sheet is in question, and you get liquor and FootJoy with Fortune Brands. On the tool side, we have two companies with stocks that have been pretty much wrecked: Black & Decker (BDK - commentary - Trade Now) and Stanley Works (SWK - commentary - Trade Now). They are certainly not confirming the WHR move (makes me feel like takeover talk has to be considered.)

But I really think that Whirlpool is saying -- like all the other stuff I am writing -- that the housing bottom is firm and for real.

Now, you could say that Whirlpool is up on takeover talk because Electrolux, long considered the natural buyer, is up on a good quarter. I don't know.

I don't want to outthink it. As always, though, what galls me is that the people who cover the home beat don't even realize that Whirlpool is an important clue. They just never relate the empirical stock action with the stories about housing foreclosures. Only Ron Insana, in "Market Movers," seems to see what I see. When others do, it will be too late. Remember, the key to any trend is to recognize when it is about to turn, not when it is turning (as I talk about today in a video with the excellent Debra Borchardt about SanDisk (SNDK - commentary - Trade Now))

WHR goes up because things are getting better in the home. I would love it if somehow that translated to better prospects for Home Depot (HD - commentary - Trade Now), which I own for Action Alerts PLUS. Sure hasn't happened yet.

But I take that one day at a time.

Random musings: On CIT (CIT - commentary - Trade Now) -- more shares are trading than there are shares, no doubt that some know something and others don't, which is why a halt in trading seems right. ... Run, don't walk, to the Opinion section of the flagship site to read the brilliant piece by Dave Bunting and Brett Haire about what the government should do about the TARP warrants.

At the time of publication, Cramer was long Home Depot.

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