Jim Cramer fills his blog on
every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- the next big signal from the market;
- the one toxic area; and
- what's working now, what isn't.
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, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
What Stocks Are Saying Now
Originally published on July 23 at 12:00 p.m. EDT
You can see what's happening. The market's getting split here. The bears are saying that the Treasuries fell below 5% (big, big rally) because of total fear. But the non-bears (can't call them bulls, as you will understand in a moment) are making lots of noises
stocks to say that it's a first-class slowdown related to housing and gasoline prices.
You know all of the flight-to-quality reasons: deals that can't get done and paper that's too toxic to own so everyone and his brother is selling toxic stuff to get into safety.
But the slowdown? I need you to check out
Procter & Gamble
Clorox ran up Friday off a big buy of August 65 calls. Lots of takeover chatter. But today, no deal, and the stock is still going up.
P&G hasn't been able to move up a point in ages. But in this environment, the slowdown thesis environment, it moves up effortlessly.
Medco Health Solutions
, another classic counter-cyclical, is breaking out to new highs.
up a buck
starting to make a move.
These moves are not happening in a vacuum. These are really hard-to-move stocks and they are saying -- no,
that we are going see a big slowdown, and the market's freaking out right now. Don't believe these drug stocks can levitate, either -- check out
( CFC) -- on a strong economy.
When in doubt, I go with stocks. Because without them you are going to miss an awful lot of somewhat easy appreciation.
At the time of publication, Cramer was long Clorox.
Only Housing-Related Stocks Are Roped-Off
Originally published on July 24 at 9:33 a.m. EDT
The cordon remains up. More than ever.
( CFC) having problems with credit-worthy borrowers. That is a big change.
the worry that the market's dictating. In fact, it says, "Look, the homebuilders need to be avoided at all costs and someone's going to go belly-up."
The cordon remains up because this is a major change from what Angelo Mozilo had been saying as recently as last spring.
Usual suspects: anyone who makes or buys loans -- corporate, mortgage, whatever. Mortgage is becoming a complete joke at this point. Homebuilders?
? Sold to you.
But the other side of the cordon gets stronger and stronger. I hope
impacts all of the takeover names in chemicals, because they are doing well.
is giving you another chance to get into tech. Soft goods now working;
working. Lot working.
? Coming down.
Getting real interesting.
Just stay away from the roped-off toxic area.
At the time of publication, Cramer had no positions in any of the stocks mentioned in this post.
What's Working Now, and What Isn't
Originally published on July 25 at 10:52 a.m. EDT
The formula is simple. It's like a checklist for what you can and can't own in a slowing U.S. economy with
credit woes throughout the system brought on by what always brings it on: declining underwriting standards.
So first, here's the checklist of what
Does it need lower rates from the Fed to go up? Countrywide ( CFC) now tops this list. And any housing company -- Lennar , Toll , Centex , Horton , Pulte . I am really worried about these. Also, all banks, all brokers.
Does the consumer need to borrow in order to finance the purchase? That's almost every retailer. Circuit City comes most immediately to mind.
Does the corporation or the private banker need to borrow in order to make an acquisition (as opposed to using stock or cash on hand)? That takes out all private equity.
Does it have mostly domestic business? Does that business get hurt on a further decline in housing or GDP? Can it be offset by international demand? There are tons of companies that fall into this category.
It's a four-point program!
Now, what can be bought?
Soft goods with good growth overseas. Pepsi's now the best. Colgate , after the quarter. I like Clorox . Kimberly-Clark's now good.
Machinery, metal and mining stocks, the infrastructure you need to take advantage of them -- and what transports them to overseas. I don't include coal because the green movement has stopped it for now and the government has given up supporting coal -- at least, until it realizes it has no choice. Caterpillar's right again. Foster Wheeler on a pullback, KBR on a pullback, McDermott after the quarter, Fluor , CB&I , Jacobs , Manitowoc , Terex .
Oil -- but not gas, unless we get some sort of disruption of supply for the latter. Extracting oil anywhere but North America is the strongest area, followed by the integrated oils. Will natural gas come back? Everything will come back, but this is a checklist of what can be bought now. Transocean on a pullback, Halliburton on a pullback, Schlumberger on a pullback, Conoco and Chevron now. XTO ( XTO) for those willing to wait, as this one is the best wildcatters in the world. Apache's good too.
Tech that's international that does well as part of the back-to-school and holiday buildup. Dell , Hewlett-Packard , Texas Instruments , Adobe all good.
Drugs that do lots of business overseas. Merck , Schering ( SGP) and Lilly all good.
Health care cost containment. Think Medco and CVS .
Aerospace and defense. Aerospace because demand is international with a new product cycle, and defense because we now know the war drags on, no matter what. Alliant Tech is the best there, now that we have seen Lockheed Martin . I would still buy Lockheed and L-3 and Raytheon . Boeing works. So does Riverbed .
The Web. Google's been punished long enough. Growth is too great. Omniture ( OMTR) and Level 3 are the preferred specs.
Ag. Be careful about a robust corn crop, but this works into the election. Deere , Bunge , Monsanto .
Telco infrastructure. They need to build. They can't help it. They have starved their infrastructure -- check Noah Blackstein's excellent piece from Tuesday. Cisco , Ciena , Juniper and even Sycamore (that's how strong this is now).
What happens if you own one of the stocks that is on the bad checklist?
Sell if you can't take pain.
I can't be more honest than that. I am used to taking pain. Most people aren't. Sell. And be aware, if I own one of the "sell" stocks for my
Action Alerts PLUS, it's
contradictory -- I'm running a long-term, balanced portfolio that can't ignore 50% of the
, which is pretty much what I am ruling out here.
If the average audience of Stockpickr can be the judge, everything I do is contrary and inconsistent, but that's because I am writing about both my time frame, which allows some of the bad, and the current time frame, which doesn't. I find that lack of discernment ridiculous; most of the people who read me act like hedge fund managers and only care about tomorrow or today. That's silly, but it's the audience so I play to it.
At the time of publication, Cramer was long Clorox, Caterpillar, Transocean, XTO Energy and Hewlett-Packard.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
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