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Bounce on the 3% Yield Trampoline

This dividend level is providing solid support for chemical and bank stocks.
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This column was originally published on RealMoney on Jan. 18 at 11:05 a.m. EST. It's being republished as a bonus for readers.

Another sign the


might be done: The 3% yield level really seems to provide better support for stocks than I thought.

I am looking at the chemicals and the banks -- where the 3% yield lives and the 4% yield should beckon -- and the stocks are holding up under that onslaught perfectly. That's the trampoline factor that you need to buy when there are too many bulls (really bad readings on

Investors Intelligence

bull/bear survey) and the

oscillators say we are still too overbought. You need that cushion to venture out in this weather.

I am focused, for example, on


(PPG) - Get PPG Industries, Inc. Report


Wells Fargo

(WFC) - Get Wells Fargo & Company Report

. Wells missed estimates big-time, yet it's above where it reported --


TheStreet Recommends

. That's the tell of a lifetime on the banks, and is why I wrote that

column last week saying

The Wall Street Journal's

headlines about the banks would really throw you off the scent of the bull.

Last week, Goldman Sachs cut numbers drastically for PPG and I figured the stock could drop to the low $50s, but that the dividend, bountiful and


, kept that from happening.

Do not forget that the after-tax return of 3% dividends handily beats short-term Treasuries, and that's what's really in play here.

Random musings:

Blame Reg FD for



problems. Sue Decker was unable to shade because of the rule, which all individual investors love but those of us who are focused on the day-to-day machinations of stocks hate. ... Reinsurers are getting killed but the big Benfield survey says rates are going up nicely -- I reiterate that


(AIG) - Get American International Group, Inc. Report

is so right here. ... The Cramer-haters are out in full force about how I lured people into this market at the high. Let's recap: Before the ramp I said to buy. Some people have made 10% to 20% already this year. Was that to be passed up? Second, let's understand each other: I wrote that I would be short common against my call positions for





(MRVL) - Get Marvell Technology, Inc. Report

if I were allowed; I would now be bringing in some of that common short against the calls.

At the time of publication, Cramer was long PPG Industries and Wells Fargo.

James J. Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

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