Will This Blast Last?

There are many things I don't know or understand, and today's action only adds to that list. Stocks pared their gains, but still finished solidly higher despite what seems to be a dearth of positive news; Deere (DE - commentary - Cramer's Take) was big weight after the farm-equipment maker only met earnings estimates and provided cautious guidance. Is this a precursor to the end of infrastructure plays?

Many of the related names, such as Cummins (CMI - commentary - Cramer's Take) and Joy Global (JOYG - commentary - Cramer's Take), also suffered losses and saw nearly twice as many puts trade as calls.

In a sign that global growth might be slowing, China reported its second consecutive month of decrease in the demand for fossil fuels. Of course, the numbers don't include the impact of the recent earthquake, which will likely cause a super spike in need for infrastructure equipment, health care products and services, and general manual labor for clean up detail.

But will the need for rebuilding divert capital from expansion that has been driving China's super growth? Is the silver lining of tragedy that it will cool demand, and therefore lower inflation pressure.

Of course, this has not taken the shine off solar stocks, and today we have a new speculative play in Evergreen (ESLR - commentary - Cramer's Take), which jumped 14% to $9.50 and is now up over 20% in the past two days. This little company saw its options trade over 30 times the daily volume, with the focus being in the June 10 calls. Hey, if you can't afford the big-ticket price of First Solar (FSLR - commentary - Cramer's Take), which changes hands around $300 a share, then trade on down.

It worked very well in Canadian Solar (CSIQ - commentary - Cramer's Take), which had been trading around $8 just six months ago, but has tacked on some 20% in the past two days following its earnings report and now has a $30 handle.

Not to put a dark cloud around this silver lining, but the pattern of trying to find the next big winner (AKA as currently dollar cheap) in a hot sector usually doesn't play out well -- see the tech bubble -- and often indicates the trade is getting too crowded and the run might be coming to an end.

Remember, in all our lives, a little rain must fall.

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Steven Smith writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks. He also doesn't invest in hedge funds or other private investment partnerships. He was a seatholding member of the Chicago Board of Trade (CBOT) and the Chicago Board Options Exchange (CBOE) from May 1989 to August 1995. During that six-year period, he traded multiple markets for his own personal account and acted as an executing broker for third-party accounts. He appreciates your feedback; click here to send him an email.

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