Too Much Good Out There to Be Negative

Even during the dips, it just doesn't feel like the rally is quitting. That's what it appears like to me, although I understand a selloff on the beige book good news. You know there are a lot of people who want out the moment that the Fed turns off the spigot, and a strong beige book says the day may soon be upon us.

But I want to buy this dip. I want to buy it because there are too many upgrades and too much positive sub rosa news flow, like Union Pacific (UNP - commentary - Trade Now) saying that autos and chemicals are doing better; or various retailers letting us know traffic's been good; or so many techs saying that sales are very strong, particularly in anything handheld. Mortgage applications are way up again, as they are anytime we get to 5% rates, and I am tired of reading about the people who will soon not be able to pay their adjustable-rate mortgages -- you can refinance at once-in-a-lifetime rates, and the people who are worried about 2012 resets ought to remember that better times can happen.

Oh, and while I am at it, the pending contract figures for the West are way up, with California up 20% from a year ago even though the California tax credit is now completed. The buyers aren't staying away, so you will see very big home sales in October and November. Of course, we will hear when we get there that the expiration of the federal tax credit will hurt sales, but I care about inventories, and they aren't building -- they are going down. That means price stabilization continues, which is all we need to drive the banks higher. Plus, don't look now but Wells Fargo's (WFC - commentary - Trade Now) mortgage modification numbers are gigantic, and that means a decline in bad housing loans for the bank that is most shot against by the shorts.

Items like railroad carloadings are totally actionable. You can see numbers going from being down somewhere in the 20s, to down in the teens, to now down would could be single digits. You also know when carloadings are better that auto sales are better. That doesn't mean more profitable -- I am very worried about Ford's (F - commentary - Trade Now) status with the unions. But I do mean volume, which is great for the Johnson Controls (JCI - commentary - Trade Now) and Honeywells (HON - commentary - Trade Now) of the world.

I also get the sense that the analysts who have been on the fence waiting for lower prices to recommend stocks simply can't take it anymore and are upgrading like crazy.

Meanwhile the "in play" feel of Kraft (KFT - commentary - Trade Now)/Cadbury (CBY - commentary - Trade Now) resonates with anything that's not too large to be acquired.

None of this may be sustainable, but it isn't in the stocks now -- particularly the heavily shorted ones -- so you know we could still run higher and are not done for the month or year on the upside.

At the time of publication, Cramer was long Wells Fargo, Johnson Controls and Honeywell.

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.