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
TheStreet Open House

Cramer's 'Mad Money' Recap: Analyzing the Unexpected

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.






NEW YORK ( TheStreet) -- The only thing worse than being wrong is not knowing why you were wrong, Jim Cramer told "Mad Money" viewers Wednesday as he looked into why the horrible quarter projected by FedEx (FDX) did not send the markets lower, as he expected.

Cramer said that no company touches as many businesses and consumers as FedEx, so when the company fell short on its numbers, he expected the markets to be obliterated. As Cramer's said many times, the transports can either confirm or disprove a broader rally, since just about all of our economic output must then be shipped to businesses and consumers.

So what went wrong? Why didn't the markets react as expected? Cramer identified four things he missed.

First, Cramer said that shares of FedEx only fell 2% on the news, even though this was the company's first bad quarter in three years. He said investors were clearly thinking that if the European Central Bank has positive things to say about the debacle in Europe later this week, FedEx will be the first company to benefit from a pickup in economic activity.

Second, Cramer said the FedEx news really wasn't that much of a shocker, especially since rival UPS (UPS) had pretty much the same sentiment when it last reported. The FedEx news, it turns out, really wasn't news at all.

Third, Cramer noted that the transports, while important, aren't the only market indicator he follows. The iPath Dow Jones Copper ETF (JJC), a barometer for economic activity, and the Currency Shares Euro Trust (FXE), a gauge of Europe, were both in the green all day.

Finally, Cramer said there are simply enough positive things happening here at home, such as strong housing and auto sales, that perhaps the bad news out of FedEx just didn't matter as much as expected. The FedEx news is, after all, looking in the rear-view mirror, while all of the positives we're seeing are harbingers of the future.

So the next time you make a prediction about the markets and it doesn't some true, make sure you analyze why or it'll surely happen to you again.

1 of 4

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 17,172.68 -107.06 -0.62%
S&P 500 1,994.29 -16.11 -0.80%
NASDAQ 4,527.6890 -52.10 -1.14%

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