If you bought into today's weakness, you've gotta be pretty happy with your decision, Jim Cramer told his Mad Money viewers Monday, after a wild ride on Wall Street that saw the market down 1,100 points at lunchtime, only to close up nearly 100 points by the close.
Bottoms can happen in the blink of an eye, and that's precisely what happened today. The sellers simply exhausted themselves and had nothing left to sell. We haven't seen one of these crescendo bottoms since 2020, but Cramer correctly predicted last week that the bottom was close at hand, and today, he says, it finally came.
The sellers and fear mongers were factoring in a tremendous amount of negatives, including the possibility of an all-out recession. But Cramer noted that things are rarely as bad as they appear.
Other than JPMorgan Chase (JPM) - Get JPMorgan Chase & Co. Report and Netflix (NFLX) - Get Netflix, Inc. Report, earnings haven't been horrible. Today we saw not one, but two, takeover bids for Kohl's (KSS) - Get Kohl's Corporation Report. The home builders were also surging after weeks of declines. Even the cloud stocks, like Adobe Systems (ADBE) - Get Adobe Inc. Report and ServiceNow (NOW) - Get ServiceNow, Inc. Report, were able to rally 3.9% and 3.5% respectively. None of that spells recession.
Smart investors make a plan and stick to their plan, buying the right stocks at the right levels. At the peak of Monday's selling, down stocks outnumbered up stocks by nine to one. That, Cramer concluded, was the right level.
Next Generation 50
Now that the markets have begun to bottom, where should investors look for buying ideas? Cramer turned to CNBC's "Next Generation 50" list to find the companies that could be poised to rally first. He used strict criteria to whittle the list down to just 10 names, all of which are forecast to have actual profits in 2022.
Cramer's list of favorites was a diverse one, spanning the gambit from cybersecurity to retail to biotech. They included Palo Alto Networks (PANW) - Get Palo Alto Networks, Inc. Report, which Cramer said should be among the first stocks to turn higher, and Airbnb (ABNB) - Get Airbnb, Inc. Class A Report, the travel name that Cramer featured earlier this month. He also recommended DoorDash (DASH) - Get DoorDash, Inc. Class A Report, as delivery continues to be red hot, and Etsy (ETSY) - Get Etsy, Inc. Report, the online marketplace for handmade items.
Some larger names on the list were PayPal (PYPL) - Get PayPal Holdings, Inc. Report and Moderna (MRNA) - Get Moderna, Inc. Report, but Cramer also called out smaller names like Upstart (UPST) - Get Upstart Holdings, Inc. Report, Enphase Energy (ENPH) - Get Enphase Energy, Inc. Report and the Dutch Bros. (BROS) - Get Dutch Bros Inc. Class A Report coffee chain.
Off the Charts
In a Monday edition of his "Off The Charts" segment, Cramer checked in with colleague Tom DeMark, of DeMark Analytics, for an analysis of when cryptocurrencies bitcoin and ethereum are likely to bottom.
Unlike stocks, crypto doesn't offer investors a lot to go on. There are no underlying companies or fundamentals to fall back on. We don't even know how much currency even exists. But DeMark has successfully used his proprietary analysis to develop a 13-day countdown as to when currencies like bitcoin and ethereum are likely to top and bottom.
DeMark noted that his analysis correctly predicted bitcoin's 50% decline in 2021 and also forecast the top before this year's decline. He felt current levels of 30,557 could mark the low in bitcoin before it turns positive.
DeMark also noted that the 55% decline in bitcoin, both last year and this year, both have lasted 50 days. The declines have followed the exact same downward trajectory.
Ethereum also follows DeMark's 13-day countdown. He calculated a level of support at 1,859 for this cryptocurrency.
For an update on the supply chain crisis, Cramer checked back in with Ryan Petersen, CEO of Flexport, the privately-held logistics software company.
Petersen said that sadly, things are not any better than when he last appeared on Mad Money in the third quarter. He said delays at the port of Long Beach in Los Angeles still hover around 20 days. He said for some reason, unions and employers can't seem to agree on automation and efficiency, which has led U.S. ports to be far less efficient than other countries around the globe.
Cramer said it feels like solving this problem is not a national priority and Petersen agreed. He said despite delays being just five days at the port of Oakland, companies continue to do what they've always done, which is sail all of their ships into Los Angeles.
Despite this being one of the quickest ways to stamp out inflation, America just can't seem to get its act together.
In the Lightning Round, Cramer was bullish on EQRx EQRX.
Cramer was bearish on DigitalOcean (DOCN) - Get DigitalOcean Holdings, Inc. Report, Occidental Petroleum (OXY) - Get Occidental Petroleum Corporation Report, Cue Health (HLTH) and ADT (ADT) - Get ADT, Inc. Report.
Tensions over Ukraine
In his No-Huddle Offense segment, Cramer opined on the growing tensions between Russia and Ukraine. He said in his mind, Ukraine should belong to Ukraine, but unfortunately, he doesn't make the rules.
How will escalations in Ukraine affect your portfolio? Cramer said investors who are worried can follow the geopolitical tensions playbook. That means buying up the oil stocks, as the price of crude will likely spike if Russia invades. Investors can also look to buy safety stocks like the consumer staples and the drug stocks. Finally, Cramer recommended buying the defense contractors, which will do well supplying arms to those who need them.
At the end of the day, there's little the West can do to stop Russia, Cramer said. It shouldn't come as a surprise that Russia doesn't want Ukraine as part of NATO, but that certainly doesn't justify Russia's actions.
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