What a Nutty Market

Some things are making sense today. Others seem stupid and totally S&P-related, all because of oil.

We now, at $130, need a slowdown or a decline in oil to advance.

But when we get it, everything advances -- indeed advances to kind-of-absurd levels. Does Ralph Lauren (RL - commentary - Cramer's Take) deserve to tally a point? Home Depot (HD - commentary - Cramer's Take) a half a point? Sears (SHLD - commentary - Cramer's Take) on a rally even though we know the company could report a horrid number, even a loss? I know Darden (DRI - commentary - Cramer's Take) got upgraded, it has been knocked down pretty hard. So we take up all restaurants, like we are now going to go to them? Hmmm.

Does tech really deserve a boost? Is this decline in oil the moment to go buy Lam Research (LRCX - commentary - Cramer's Take), even though nothing is great there and the upgrade seems fatuous?

Or how about the brokers? They opened up! Rails carry the stuff that makes steel and alternative energy. They are up? How does that happen when the actual commodities they carry are down? Union Pacific (UNP - commentary - Cramer's Take) is joined at the hip with U.S. Steel (X - commentary - Cramer's Take), but one is rallying and the other is being killed.

Talk about a great time to short something.

Now what did make sense? No one wants to believe -- no one -- that new-home sales actually went up month to month. That's just an overlooked fact that house sales increased at a 3.3% rate, moving from 509,000 to 526,000.

At the same time, the prices of homes dropped big this past quarter, by the most in 10 years.

I say yes, that's what should happen if we are going to bottom, and we can bottom because if we stop building new homes, we will run out of supply from bargain-hunters and from new household formation, which must be climbing simply because our population has been climbing. Maybe it is even taking out the fabled 865,000 level, where it has been for years.

That's why the HGX is going up. And, amazingly, Standard Pacific (SPF - commentary - Cramer's Take) got additional financing. That's just plain bullish, even if it is ridiculous.

I am banking on a bottom in the HGX. I am not banking on a bottom in banks, with there being no tie-in to Lehman (LEH - commentary - Cramer's Take) by oil, and the bears won't stop there until they win. They just won't.

Now, the battlegrounds to me are the drugs. Think about it -- if oil declines, doesn't that help the economy? But if the economy is going to accelerate, we should be dumping this group. And the other one is gold: I really like gold, I like gold on any dip, because things are so problematic in terms of inflation and growth that gold is the only safe haven in this country. The market totally disagrees with me. Totally.

The bottom line here is that today other than housing -- which no one in the media seems to believe in -- this market makes almost no sense.

It's just nutty out there.

Random musings: When looking at the charts, I was kind of amazed that after this Apple (AAPL - commentary - Cramer's Take) run, it is still down for the year. How about that Verizon (VZ - commentary - Cramer's Take) is down almost double AT&T (T - commentary - Cramer's Take) this year. Are they that disparate? I don't think so. ... Is there anyone who comes on TV who doesn't like technology?

At the time of publication, Cramer was long Sears and Verizon.

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