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"The real reason for today's selloff was technical," Jim Cramer told the viewers of his "Mad Money" TV show Monday.
He said today was one of those days when the charts were in control.
Despite what the pundits on TV may tell you, Cramer said the economic recovery was not derailed today. High oil prices, a strong dollar and Obama's healthcare reforms are not going to plunge us into a deeper recession, he said.
He said the markets tanked because for technical reasons.
After looking at a chart of the S&P500, it was clear to him that the market had gotten ahead of themselves, when it crossed both the 10-week and the 30-week moving averages. When this happens, especially in such a strong fashion, a snap back to reality is almost always the result, he said.
Cramer said the good news is that after today's decline, "we're almost there," referring to the point where the two averages meet.
Once we're there, he said, the fundamentals will once again be in control, and the bull market will return.
He said he's not worried because "today's selloff was on the lightest volume in weeks."
Cramer spoke with Mark Benioff, CEO of software as a service giant
, to see if that company's fortunes have changed since Benioff's last appearance on Nov. 21. Since that appearance, shares of Salesforce.com have risen a staggering 82%.
Benioff said the environment is still challenging for Salesforce, with revenue growth at just 10% in its most recent quarter. However, he said the company has $1 billion in cash and is still the fastest growing software company in its class.
Benioff said the economic downturn has affected his company's sales to new customers, but it continues to grow its existing install base as the market continues to adopt its cloud computing model in greater numbers.
Cramer said he remains a fan of Salesforce.com, especially given how NBC Universal, parent of CNBC, as well as
( TSCM), the company Cramer founded and currently chairs, have both seen first hand how the company's software saves money. He said that if investors believe the economy is turning for the better, Salesforce.com is the stock to own.
Staying No. 1
What's it take for a stock to hit the 52-week high list? Cramer found out as he examined the stocks of cigarette paper maker
and storage device maker
( CML), two stocks that call the 52-week high list their home.
Cramer said there are a number of things these two companies have in common, starting with niche markets. Schweitzer Mauduit manufactures specialty papers and is the No. 1 or No. 2 supplier for cigarette papers around the globe. Compellant specializes in storage systems for small and medium companies, a niche with a large pool of potential customers.
Cramer said both companies also have a secular growth driver. For Schweitzer, it's the weak dollar and the fact the company makes a better product than its competitors.
For Compellant, the driver is its customers' need for more and better data storage, something that's not going out of style any time soon, said Cramer.
Finally, Cramer said both companies have a history of beating earnings and of under promising and over delivering when it comes to those earnings. He said this appears to be the recipe for getting on, and staying on, the 52-week high list.
Outrage of the Day
Cramer sounded off against the government bailouts of
Cramer said he's been in favor of many of the government bailouts, and feels overall that the
and Treasury Department have been doing the right thing.
However, unlike the banking crisis, where there was serious systemic risk, Cramer said these two insurers just took a gamble and lost, and therefore shouldn't be rewarded.
According to Cramer, these government bailouts have prevented bad companies from either being taken over or just dying outright. These insurers, he said, made bad decisions and simply took on too much risk, he said.
Cramer was bullish on
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At the time of publication, Cramer was long Cisco, Bristol-Meyers 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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