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The market is still trending higher because the bears are losing their places to hide and the bulls are just winning, Jim Cramer told the viewers of his "Mad Money" TV show Friday.
Cramer said today was another day where the bears and shorts lost another reason to be negative on the markets.
The bears thought the Treasury Department's banking stress test was a win-win, he said. That's because they believed the tests could've been too tough and the government would've been forced to gobble them all up.
On the other hand, they reasoned the tests could've been too easy, and the whole thing would've been called a sham. Yet in the end, the Treasury stress test was exactly what the bear didn't want, namely a statement that everyone needs more capital, and more time for the banks to find it.
With stress tests now a non-issue, the bears have only valuations to scare off investors with, said Cramer. However, he said, the only problem with that is that valuation is in the eye of the beholder.
In the battle of hedge funds versus mutual funds, the mutual funds are winning, said Cramer. These funds need to get fully invested and are buying stocks faster than the hedge funds can short them.
Cramer cited example after example where the big money is buying in, and taking stocks higher. In the eyes of the mutual fund managers, these stocks appear cheap:
Bank of America
, said Cramer.
If you look at a one-month chart of these stocks, they're expensive, but if you look at a one-year chart, you'll see why the bulls are winning, he said.
In this segment, Cramer turned to the financial sector and recommended
First Niagara Financial Group
, a regional bank in upstate New York that's making all the right moves.
"Stop stressing about the stress tests," said Cramer. The real action, he said, is in the ultra solvent regional names like First Niagara and
in Ohio, who Cramer previously recommended.
Cramer said the story of First Niagara is simple: Thanks to the government, the company is now expanding into western Pennsylvania, as
is forced to sell branches to First Niagara in order to complete its merger. The company issued $361 million worth of new stock this week to fund the acquisition, only to see shares continue to rise in value.
But there's more to love at First Niagara, said Cramer. The new equity offering allows the company to also pay off its TARP money, making it even stronger than it already is. First Niagara already sports a small net charge off ratio and has fewer bad loans on the books than similar banks its size.
With the new acquisition, First Niagara will become the largest bank in western Pennsylvania almost overnight.
Am I Diversified?
Cramer spoke with callers about their portfolios to see what it takes. The first caller's portfolio included
Cliffs Natural Resources
Cramer said this portfolio was "perfection."
The second caller's top holdings included
Bank of America
Cramer said this portfolio needed some radical action to unload the extra financials in favor of stocks in other sectors.
The third caller had
( JAVA) as their top five stocks.
Cramer said there were too many financials and two of a kind in technology. He recommended adding a healthcare and a housing-related stock.
In this segment, Cramer told a viewer that he doesn't expect a lot from
, given they're defensive stocks, but he advised holding them as long-term investments.
Cramer was bullish on
Cramer was bearish on
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At the time of publication, Cramer was long Wells Fargo, ConocoPhillips, General Electric, Celgene, Wal-Mart.
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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