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TheStreet.com TV Recap: Bowling for Pin Action

TheStreet.com Staff

One of the reasons there is a lot of "pin action" from stocks reporting earnings today is that expectations for the companies are so low, Jim Cramer said on TheStreet.com TV's Wall St. Confidential Web video Tuesday.

"When we hear anything good [about one company] we realize that the expectations have been ratcheted down for a whole industry," Cramer told Gregg Greenberg, the host of Wall St. Confidential.

Pin action is when good news from one company lifts others in a sector, or others that do business with those companies.

In Black & Decker's (BDK Quote) case, there was a "big inventory glut," Cramer said. But now that it appears the glut has been relieved for Black & Decker, "it's pretty reasonable to expect it's been relieved at the Sears (SHLD Quote) Craftsman level, too."

Going back to Sears' year-ago quarter, Cramer said it is "very clear" the retailer's Craftsman outdoor/hardware division is the one that was hurt the most.

Moreover, Matthew Fassler of Goldman Sachs upgraded Best Buy (BBY Quote) on Monday "with the hopes that we've caught a bottom in durable goods purchases," he said.

When market-players overlay Best Buy on Sears, there's some pin action, and when they put the Craftsman overlay with Black & Decker, there's more pin action, Cramer said.

Further, when people realize that the retailer's clothing business had been doing "very well," Sears becomes a story that was supposed to be trapped between $185 and $190, but instead "may be breaking out here," he said.

Changing topics, Greenberg noted Daniel Harrison's article on the TheStreet.com, "Asia's Fall a Distant Memory," and how the iShares MSCI Emerging Markets (EEM Quote) has moved back above $120.

"To some degree, we could be complacent in the sense that you know that the Chinese government doesn't like this," Cramer said. "They're against speculation."

Something Cramer said "really annoyed" him recently was when he was on Erin Burnett's "Street Signs" show on CNBC, and her guests (managers who invest in China) "felt that the decline was not a buying opportunity."

"They were horribly wrong," Cramer said. People need to realize that "when a decline happens, maybe it's prudent to buy, not run from it."