Action in the Eateries Can Be Seen All Over

A week ago, Brinker (EAT - commentary - Trade Now) rocked the restaurant world with horrid guidance. The casual-dining restaurant, part of the turn that started in December and signaled a brighter economy, seemed to say that the move was over.

The reaction was swift. All the restaurant chains got marked down. The rally was declared over.

Well, it's a week later, and the group's not moving down. Some, like Panera (PNRA - commentary - Trade Now), Ruby Tuesday (RT - commentary - Trade Now) and Cheesecake Factory (CAKE - commentary - Trade Now) haven't given up their gains at all. Others, like Yum! (YUM - commentary - Trade Now) and Wendy's (WEN - commentary - Trade Now), are going up. (I recommended Wendy's yesterday on "Mad Money" because the turn is upon us.) CKE (CKE - commentary - Trade Now) acts well and has given up less than a point off of its huge run. And yesterday McDonald's (MCD - commentary - Trade Now) reported an excellent number.

I think this Brinker selloff is indicative of something that Rev Shark talked about in his closer yesterday: The sellers just won't materialize. They didn't materialize yesterday when the futures tried to push the market down, and I don't think they will materialize today. Just as tech didn't take its cue from Dell (DELL - commentary - Trade Now), the restaurant ended up not taking its cue from Brinker. Maybe that's right, as Chili's is not by any means the strongest player in the group.

Why haven't the sellers come back? Why isn't there more profit-taking in this group? I think it's because of the realization that things are simply better and there's no reason to sell. There's simply no reason to have one foot out of the door anymore. The possibility of the hellacious declines of 2007, 2008 and the beginning of 2009 have ended.

This alone is the new landscape that makes me less bearish than others, although you can't be as bullish at Dow 9300, and 1000 on the S&P 500 as you were when Doug Kass nailed the bottom.

The sellers just don't surface. They don't whack bids. They don't create dislocations. In short, the sellers aren't desperate.

It was desperate sellers and short-sellers that worked hand in hand to destroy the market in the last couple of years. The former played more of a role than the latter in all but the banks.

With the sellers quiet, it makes easier to hold a CAKE or a YUM right through this period.

The lesson of EAT is instructive. A terrible guidedown, horrible chatter and a sense that a move is over comes from a leader ... and then nothing happens. No follow-through.

That's the action that defines this market since the Kass bottom. You could argue it creates complacency. I think it simply signals that the hot money's getting more money in, or that redemptions have ended because performance is better, or mutual funds need to catch up to the averages by buying. It is simply bull-market action, and it colored Friday's rally and it colored yesterday's muted decline.

Random musings: Run, don't walk, to see a powerful view of what could happen -- not a "V," not a "W," just "ehh" -- by Doug Kass, with "ehh" being a very tough place to make money because it implies constant rotation. It is a view that I understand and I even address it in my next book in a favorable way. But there's one thing Doug left out -- I totally and completely piggybacked off of his bottom call and would most likely not have made it on my show and here without him. I did think there was minimal downside, but his switch was a generational call, and I will never forget it. As someone who at 11,000 and 10,000 told people to get it, it was vital to go back in there or else the opportunity for capital gains would be lost, and I owe it to Doug. Thanks Mr. Kass, you are MORE THAN WORTHY!

At the time of publication, Cramer was long Yum! Brands.

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.