A funny thing happened on the way to this sell off, Jim Cramer told his Mad Money viewers Tuesday.
Today felt more like the end of a rotation, not the beginning of a new one, as multiple crosscurrents and a lack of earnings and other data keep investors guessing.
Cramer explained that typically, selloffs in tech, like we saw on Friday, are sparked by earnings shortfalls or some other spat of bad news.
Finally, on day three, typically, the techs stabilize and money flows out of the safety names and back into the broader market.
But on Friday, there were no earnings misses, so shortfalls to speak of. Some investors started locking in gains of Nvidia (NVDA) - Get Report , and an analyst issued a negative report on Apple (AAPL) - Get Report , (an Action Alerts PLUS holding) but that was about it.
This all led to yesterday, where there was no follow-through in the selling because, well, nothing was really wrong.
But that makes today's strength in some of the financials, mainly Visa (V) - Get Report and Mastercard (MA) - Get Report , along with a rally in Home Depot (HD) - Get Report and Scott's Miracle-Gro (SMG) - Get Report so puzzling. These are not the stocks that would be typically bought in the middle of a rotation.
Cramer said the markets could be further rattled by tomorrow's Federal Reserve meeting. If the Fed is either too hawkish or too dovish, we could see even more money trying to figure out where it ultimately wants to go.
On Real Money, Cramer looks for some weak-dollar relief and finds some surprising non-industrials. Get more of his insights and a free trial subscription to Real Money.
Off The Charts
Collins first looked at a daily chart of Emerson, noting that the stock has been trading sideways for four months. But, he noted the failed breakout in April had light volume, a tell that it wasn't likely to succeed. Since then however, the upper Bollinger band has been pushing higher and volume over the past week has spiked higher, confirming this time might be the real deal.
Turning to the weekly chart, the stock of Emerson looked even better to Collins, with shares trending in a slow uptrend that's lasted for 18 months. Collins noted that the Stochastic RSI and the regular RSI are both bullish as well.
Finally Collins looked at a new metric for Off The Charts, the 40-week trading envelope, which also favored the bulls. Collins predicted shares could see $70 over the next six to eight months.
CSX Is Moving
When an old-school, large-cap company sees its shares double in less than a year, it's time to sit up and take notice, Cramer told viewers. That's been the story at railroad CSX (CSX) - Get Report shares of which have rallied from $25 to $53, and already are up over 50% for the year.
Cramer said much of CSX's gains stem from one thing: its long-time CEO Michael Ward stepping down last month and being replaced by Hunter Harrison, the former CEO of Canadian Pacific (CP) - Get Report .
Harrison is a proponent of what's known as precision schedule railroading, the running of fewer, smaller trains on tighter schedules with tighter cost controls. Even though precision scheduling is fairly new at CSX, the company is already seeing 14% improvements in velocity and a 52% rise in on-time arrivals.
Cramer said that CSX is an earnings story, plain and simple, and the company just posted a 38% rise in earnings per share and has a $1 billion buyback and a nice dividend to boot.
Low-dollar stocks can be very tempting to novice investors, but when smart research analysts raise the red flag about "serious" concerns, the uninitiated need to stay away.
Case in point, Teekay Shipping (TK) - Get Report , a stock that's lost 90% of its value after crude oil peaked in mid-2014. Cramer noted that a recent report from Morgan Stanley (MS) - Get Report raised concerns over Teekay's liquidity, something that should have investors running for the hills.
Shares of Teekay largely follow the price of crude oil, which explains their precipitous decline since 2014. The reality is that any time oil hits $50 a barrel, U.S. producers will flood the market with supply and send prices retreating. Even OPEC is struggling to deal with this new world order, Cramer said, which leaves Teekay and others that need higher crude prices to thrive in trouble.
Given that the company's CEO resigned in January and its chairman is set to follow suit, Cramer advised investors not to buy into Teekay.
Cramer and the AAP team are giving their investment club members some updates on two key portfolio holdings: Walgreens (WBA) - Get Report and Starbucks (SBUX) - Get Report . Get in on the conversation with a free trial subscription to Action Alerts PLUS.
In the Lightning Round, Cramer was bullish on Domino's Pizza (DPZ) - Get Report , Pentair (PNR) - Get Report , Incyte (INCY) - Get Report , Mercadolibre (MELI) - Get Report , NXP Semiconductors (NXPI) - Get Report and HollyFrontier (HFC) - Get Report .
In his "No-Huddle Offense" segment, Cramer told investors to forget about Trump. The real economic growth might be happening overseas, aided by a weakening U.S. dollar.
Cramer said that shares of 3M (MMM) - Get Report are up 13 points since they last reported and that might be because the company only derives 40% of its earnings domestically. Now that end markets are stronger and currency is a tailwind, 3M might post a big surprise this quarter.
3M is not an anomaly, Cramer noted, as Honeywell (HON) - Get Report and United Technologies (UTX) - Get Report are also big overseas players. He was even bullish on Johnson & Johnson (JNJ) - Get Report and Procter & Gamble (PG) - Get Report , with its 3% yield.
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At the time of publication, Cramer's Action Alerts PLUS had positions in WBA, SBUX, AAPL, NXPI.