This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Cramer's 'Mad Money' Recap: Bullish Market Signs (Final)

Bond Weakness

In the "Off The Charts" segment, Cramer went head to head with colleague Tim Collins over the chart of iShares Barclays 20+ Year T-Bond Fund (TLT) to see if the 34% run in U.S. treasuries last year can continue this year.

According to Collins, the daily chart of the treasury index is worrisome, with the index consistently making lower highs as its directional trend indicators all point lower. He noted that the force indicator, a measure of price and volume, is also trending lower.

Collins also pointed out that bonds have many resistance ceilings, such as at $120, $119 and $118, but far fewer and much wider levels of support at $116, $112 and $108. Cramer said with so many chart watchers following bonds, a slip below $116 would be significant.

Turning to the weekly chart, Collins noted similar patterns with resistance on the upside and a long downward pattern towards the crucial level of $116 a share. The TRIX, a triple exponential moving average has also signaled a bearish crossover, yet another warning sign for the stock, he added.

Cramer agreed with Collins, noting that after trading in lock-step with the VIX volatility index, Treasuries have now diverged. He said this makes sense since the VIX measures fear and when investors fret, they buy bonds. But with the economy seemingly turning for the better, Treasuries are the last place investors want to be, he said, and that is showing in this bond fund's stuttering performance.

Cramer said the time to sell bonds and bund funds is now, as they will be dead money as stocks continue to heat up.

Union Pacific vs. Northfolk Southern

The next installment of "All Request Week" was a tweet that asked Cramer to compare railroads Union Pacific (UNP) and Norfolk Southern (NSC). He was only too happy to oblige.

Cramer said he's a big fan of the rails, as they are one group that directly benefits from a growing domestic economy. He also enjoys the rails thanks to the happy duopoly that Norfolk and Union Pacific have created. That said, these railroads are not the same, said Cramer, despite the fact that both flirt with their 52-week highs and have a 16% long-term growth rate.

Cramer said he prefers Union Pacific, due in part to a repricing effort that began in 2003 for both companies. While much of the repricing to higher levels is already completed, Cramer noted that Union Pacific still has the most to gain as it completes its transition.

But the real deciding factor is coal, said Cramer. With the political favor of coal waning and the price of cleaner natural gas plummeting to historically low levels, Cramer said coal will be in real trouble going forward. This bodes better for Union Pacific, as it only get 22% of its revenues from coal vs. 31% for Norfolk. But the distinction is made even more pronounced since Union Pacific is mainly a western U.S. player, where coal is cleaner. Cramer said that Norfolk's coal on the east coast is dirtier and more subject to regulation and decline.

When it comes to earnings momentum, Union Pacific also takes the lead, with a 18-cent-a-share earnings beat this past quarter compared to a five-cent-a-share miss for Norfolk on disappointing revenues. Cramer said that Union Pacific comes out the winner on all fronts.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs