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NEW YORK (
) --"We don't have a traditional bull market, we've got a rolling set of mini bull markets," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday.
He said that unlike a traditional bull market, where everything rallies in unison, this bull market is like a relay race, with one sector handing off the rally baton to the next.
So many people have underestimated this market, said Cramer. And that's because this market isn't like any we've seen before. While the defensive stocks like
, which he also owns for his
Action Alerts PLUS portfolio,
have been rallying this week, last week's rally included only the transportation stocks.
Cramer said a few weeks ago, the oil stocks rallied big, but before that, the natural gas stocks had their turn in the relay race. The tech stocks have been on fire, he said, but only after the semiconductor stocks had finished their leg of the rally race.
Cramer said one sector after another are seemingly taking turned in the rally hot seat, then resting while other sectors take the lead. He called the recent market action "the ultimate stealth bull market," one that's mystified investors and pundits alike.
But while the naysayers predict doom and gloom, one sector after another is reinforcing the bull move higher.
To watch replays of Cramer's video segments, visit the Mad Moneypage on CNBC
In the "Off The Charts" segment, Cramer went head to head with colleague Dan Fitzpatrick over the charts of two health care stocks,
, a stock which Cramer owns for his charitable trust,
Action Alerts PLUS, and
Johnson & Johnson
According to Fitzpatrick, Abbott Labs is about to break out to the upside, while Johnson & Johnson appears to be breaking down. Fitzpatrick noted that after seven months of trading below its 200-day moving average, Abbott Labs finally started moving higher, with higher highs and higher lows, and after a mild pullback, is still surging on high volume.
Fitzpatrick said that Johnson & Johnson's chart however, shows the opposite, with the stock rallying 33% off the March lows, only to stall in late July. Since then, volume has been weakening, signaling that Johnson & Johnson may be headed lower.
Turning the the fundamentals of both stocks, Cramer said he totally agrees with Fitzpatrick. Abbott, he said, is the better company, and used the downturn to get stronger. The company beat estimates and raised its guidance after its most recent quarter, with high-quality top line sales growth.
Johnson & Johnson, however, manufactured their earnings beat, said Cramer, benefiting only by slashing R&D spending and getting a favorable tax rate. Sales at Johnson & Johnson fell by 5.3% during the same quarter Abbott was surging higher.
Cramer said Abbott is growing earnings at 11% a year, while Johnson & Johnson is only growing at 7%, and is struggling with patent issues and continued layoffs. "The fundies tell the exact same tale as the charts," said Cramer, and that's why he'd be a buyer of Abbott and a seller of Johnson & Johnson.
Playing the Weak Dollar
In the "Executive Decision" segment, Cramer welcomed Michael Johnson, chairman and CEO of
, to the show to discuss his company's current outlook.
Johnson said that with 80% of Herbalife's sales taking place internationally, his company has been benefiting from the weaker dollar. He said while he and the company is not anti-American in any way, the weaker dollar definately benefits Herbalife shareholders.
Turning to growth, Johnson said the company just launched in Vietnam, a country with 87 million people that are looking for both great meals and supplements, and a great way to make extra money in trying times.
When asked about the company's performance in a time of high unemployment, Johnson noted that Herbalife just changed their model, giving more of the company's distributors access to deeper discounts, which, in turn, has helped to raise the amount of business generated by individual distributors.
Cramer remained bullish on Herbalife, saying that the company has $250 million is cash and no debt, and have been returning money and value to its shareholders. He called Johnson "money in the bank."
Cramer told a viewer that he's not a fan of
, with no new blockbuster games due out any time soon.
Cramer told another viewer that he feels retailers will have a great holiday season. He expects a bountiful holiday season due to lean inventories and less discounting than in previous years.
Cramer was bullish on
Cramer was bearish on
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At the time of publication, Cramer was long Altria, Abbott Labs, Gilead Science, Bristol-Myers Squibb.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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