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Is the fix in? Do we have a bottom lurking -- a la Doug Kass' statements? I know that to get back to
7350 -- the intraday low -- will take some real work, but
are doing their best to create it!.
When I say "the fix," I mean that there are enough buyers out there without redemptions -- as opposed to Legg Mason's Bill Miller, who reminds me of some of the tech managers who never recovered after 1999 -- who are going to do their best to prop up prices.
Can it be done?
I think so.
But that's because of the makeup of the Dow.
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Procter & Gamble
Johnson & Johnson
all benefit from this new commodity environment. AT&T and
have scale benefits that made their lows of $20 and $23 seem like gifts. Same with
, which you see today. It is tough to take
back to $17 given its high yield and the refinance activity.
and Merck are quandaries. Their wounds and declines are self-inflicted. I don't think they can go much lower, because their dividends are safe and can make their lows unbreachable now that bonds are so low in interest.
can go back to $17, no problem -- that was the low.
got dividend protection.
is doing well but it's still vulnerable, although it is hard to believe it can go to its low of $28 given that it just surprised to the upside.
are extremely vulnerable with the decline in oil because they keep rallying. They have been totally immune to the decline, which is what makes me feel that oil will rise eventually. Right now they can get smacked, but I go back to "the fix is in," as these stocks have simply stopped trading with the rest of the oils.
just reiterated its projections -- first time for that, so I think that it will be hard for that one to take out its lows.
The banks are a question mark in terms of their lows, as systemic risk is off the table, so I don't think that
Bank of America
have a ton of downside, as they might have before TARP and all of the federal moves to help them. Same with
, although it's more vulnerable because it is poorly run.
Which leaves the swing votes:
and Du Pont. The last four are in real trouble, as we know from Du Pont's forecast, GM's potential equity wipeout and Alcoa's potential dividend cut. They are the weakest and could take out their lows. Boeing's got nothing going for it because of the strike. I suspect
all of them
will take out their lows.
But they don't have a lot of points to them!
That means CAT, UTX, IBM, MMM and DIS pretty much determine how much lower we can go, and I don't see any of them being able to take us back to Dow 7350.
So is the fix in to not break the lows? Given this bottom-up look, it would be very hard to drop more than 1,000 points. Very hard, especially given the newfound view from many people that "the bad news is in."
We all feel it, the better "tone." I don't like to bet on tone. But I feel it, too.
We had terrible tone at Dow 7350. It can always return, but we see how MOST components are at least slightly better off than the last go-round.
So I would say, yes, the fix is in.
At the time of publication, Cramer was long Chevron, GE, Hewlett-Packard, Johnson & Johnson, JPMorgan, Kraft, McDonald's and Wal-Mart.
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