If there's one steadfast rule on Wall Street, it's that everything can't go up at the same time. That means in the lunacy of the moment we're in, eventually, something has to give. Those were Jim Cramer's cautionary words to his Mad Money viewers Monday, as he tried to make sense of a market where stocks continue to defy logic.
Perhaps the most obvious conundrum is crude oil, which continues to march higher, above $80 a barrel. Higher oil prices are a tax on the whole economy, but those sectors most affected, mainly travel, leisure and transportation, are also rising. This trend can't continue. Eventually, sky-high oil prices will strangle the market, and it will likely do so before U.S. oil producers can fill the void.
Then there's Bitcoin, which, like oil, seems unstoppable. Cramer felt that tomorrow could be a peak in cryptocurrency, as the much-anticipated Bitcoin ETF isn't enough to keep prices this high on its own.
Over on Action Alerts PLUS, Chris Versace and Bob Lang talk about China's economy, crude oil, supply chain woes and, on the positive side, Walmart's (WMT) - Get Walmart Inc. Report month-long savings event, "Black Friday Deals for Days." Get more of their trading ideas and investing insights at Action Alerts PLUS.
Next, there's big tech. It's easy to see why some tech stocks, like Amazon (AMZN) - Get Amazon.com, Inc. Report and Apple (AAPL) - Get Apple Inc. (AAPL) Report are heading higher, but it doesn't make sense that Facebook (FB) - Get Facebook, Inc. Class A Report is rallying as well given recent revelations.
Finally, there's housing, where Zillow's (ZG) - Get Zillow Group, Inc. Class A Report 9.3% plunge Monday tells us that housing is bad. But then again, the share price of every home builder tells us it's good, despite the rising cost of every commodity that goes into a home, which is of course, bad.
One of these sides has to be wrong. The only problem is, no one knows which side yet.
Cramer Does His Homework
In his "Homework" segment, Cramer followed up Accolade (ACCD) , the healthcare technology company that had stumped him during an earlier show.
Accolade is a personalized health platform that aims to be a one-stop shop for employees' health and benefit needs. By all accounts, the company has a total addressable market of $216 billion and is seeing accelerating revenue growth with expanding margins. What's not to love?
Well, for starters, health tech has fallen out of style on the Wall Street fashion show, as investors have turned against growth companies that aren't profitable. That's why shares of Accolade have plunged 19% over the past six months. Accolade is not alone, others in the space, like ShareCare SHCR, are off 34% for the year. Clearly, the trend is not your friend.
Additionally, Accolade made two acquisitions this year that further riled investors. With shares still trading for 11 times sales, Accolade is just too risky. Cramer suggested GoodRx (GDRX) - Get GoodRx Holdings Inc. Report, Doximity (DOCS) - Get DOXIMITY, INC. Report or even UnitedHealth Group (UNH) - Get UnitedHealth Group Incorporated Report, which just reported blowout earnings, as more stable investments.
Off the Charts
Could the fast-growing cloud stocks be poised to again take the reins as market leaders? In his "Off The Charts" segment, Cramer checked in with colleague Tim Collins to find out. The cloud stocks are the last group Wall Street expects to rally as inflation marches on.
Collins looked at two cloud stocks, starting with the weekly chart of Snowflake (SNOW) - Get SNOWFLAKE, INC. Report. Since its lows in May, shares of Snowflake have rallied from $200 to $300 on a bullish pattern of higher highs and higher lows. Collins also introduced viewers to a new metric, the Parabolic Stop and Reverse, or PSAR, which has been bullish for Snowflake. He felt shares could rally above $400 a share, as $310 is now the floor of support for Snowflake.
Next, Collins looked at ServiceNow (NOW) - Get ServiceNow, Inc. Report, which has just completed a consolidation period that also marked the completion of a bullish flag pattern. He said the former ceiling is now the floor with a new ceiling of $680 a share. While it may take a few attempts to break this ceiling, Collins felt once it does, it will be clear sailing.
Executive Decision: Deluxe
In his first "Executive Decision" segment, Cramer spoke with Barry McCarthy, president and CEO of Deluxe (DLX) - Get Deluxe Corporation Report, the check printer that has transformed itself into a payments and business technology company for the modern era. Shares of Deluxe trade for eight times earnings and are up 38% for the year.
McCarthy explained that Wall Street has yet to catch up to the Deluxe story. Thanks to recent acquisitions, Deluxe is now a one-stop shop for small and mid-size businesses. The company can offer HR and payroll services, as well as credit card acceptance and cash management assistance. Deluxe is focused on the low-end of the small business market, which is often under served by larger providers.
Deluxe also has an up-and-coming data business, which can provide high-converting lead lists to financial institutions whether they are targeting consumers or businesses. With Deluxe, companies can best deploy their marketing dollars.
Finally, McCarthy noted that check printing is still a great cash generator, especially since his company continues to take market share.
In his No-Huddle Offense segment, Cramer told viewers that if there's one thing that keeps him up at night, it's housing.
Monday we learned that Zillow is pausing its business that buys homes, fixes them up and flips them for a profit. The news tanked Zillow's stock, but it has larger implications for the housing market.
Cost inflation and supply chain issues are running rampant in the housing sector. Everything that goes into a home is seeing a sharp rise in price and it's taking far longer for items to arrive. In the case of Zillow, which aimed to turn over homes in 30 to 45 days, well that simply can't happen when appliances take eight weeks, or longer, to arrive.
While housing remains hot in many areas of the country, that trend could quickly turn cold if interest rates continue to rise causing a shortage of buyers instead of lumber. Industry experts are beginning to sound the alarm that a sharp decline in the housing sector could soon be at hand, which is why Cramer is also getting cautious.
Here's what Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Monday evening:
Blade Air Mobility BLDE: "I think it's a terrific service, but the stock is stuck. It's hard to recommend even though it's got a good business model."
Butterfly Network (BFLY) : "It's not working."
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