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NEW YORK (TheStreet) -- Are the politicians in Washington moving toward a deal to avoid the fiscal cliff? If so, that would be good for business and terrific for the stock market, Jim Cramer told "Mad Money" viewers Tuesday.
That may just be why the market was soaring again today -- the time to get into stocks will be before, not after, a deal is announced.Cramer said the rhetoric in Washington seems to be softening lately, and today's rally foreshadows just what could happen if a deal is reached. Some of his most important indicators, such as the transports, are breaking out of their trading range, signaling the economy may be slowly coming back to life. Nothing tells you how well the economy is like planes, trains and trucks, noted Cramer. Then there are the financials, another beaten-down sector that is coming back to life. Cramer said that he still thinks stocks including Goldman Sachs (GS), Citigroup (C) and Wells Fargo (WFC), a stock he owns for his charitable trust, Action Alerts PLUS, can go higher. Cramer said what the markets need most is certainty, but the time to get into the markets is before that certainty arrives.
Off the ChartsIn the "Off The Charts" segment, Cramer went head to head with colleague Bob Lang over the chart of Goldman Sachs to see if the strong rally in that stock can continue. Looking at a two-year weekly chart, Lang noted Goldman is still well off its 2011 highs and is completing a "W" bottom formation, which is a bullish sign. He said that if Goldman can stay stay above the current resistance level then its off to $140 a share and $170 a share after that. Turning to a shorter-term daily chart, Lang also noted Goldman has been building a base since June but is now above all of its major moving averages. There has been strong volume on the up days and the MACD indicator is also showing a bullish crossover. Cramer said the fundamentals agree with the technical analysis. He said Goldman trades at just 0.9 times book value, a historically low valuation for such a well-known investment bank. The company has also been buying back stock, reducing its share count by 10% in recent years. Given how the world's economies are on the mend, things are looking up at Goldman, Cramer concluded.
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