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

Jim Cramer's 'Mad Money' Recap: This Market's Got Legs

Off the Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Bob Lang to show viewers what the phrase "rotation" really means. Using the iShares NASDAQ Biotechnology (IBB) exchange-traded fund, Lang and Cramer demonstrated how the biotechs are getting crushed as big fund managers now prefer the industrial and cyclical stocks.

Using a daily chart, Lang noted that the biotechs have fallen 12.4% in just a month on heavy volume, signaling that the big boys are indeed liquidating their positions. The Williams oscillator, or WSM, signals a deep oversold condition, as the group broke through its 50-day and 100-day moving averages.

But as Cramer noted, the weekly chart shows a different picture, one of only a minor correction in a much larger uptrend. Lang noted similar pullbacks in June 2013 and November 2012, both of which were terrific buying opportunities.

Cramer said that in the short term the outlook for the biotechs is grim, but he noted that stocks like Celgene and Gilead Sciences (GILD) are still fabulous companies, ones that will snap back just as soon as the current wave of selling has subsided.

No Huddle Offense

In his "No Huddle Offense" segment, Cramer explained why the shareholders of big, established tech and biotech companies have been feeling the heat of late. It's because of the red-hot IPO market.

Cramer said the venture capitalists know when the market is craving new deals, and that time is now. That explains why so many initial public offerings are being announced, most notably today -- Box and Dropbox.

But all the money that's pouring into these new IPOs needs to come from somewhere, said Cramer, and it's coming from big fund managers cashing in on their slower-growing tech and biotech holdings.

Cramer said that in a perfect world, the established players would be acquiring these newcomers themselves. But with the market willing to pay so much more, their venture capital backers are choosing to roll the dice and hope for that big first-day pop instead.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.

-- Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt

Follow Scott on Twitter @ScottRutt or get updates on Facebook, ScottRuttDC

At the time of publication, Cramer's Action Alerts PLUS had positions in CELG and JNJ.
3 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 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

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