Getting a little routine isn't it? Here we are again up another 100 points without so much as a 50-point breather on the downside. How much longer can this continue?
Oddly enough, as long as there is a steady stream of bad news out of East Asia I think we will be fine. Otherwise, this economy would be too hot for its own good. If productivity had not picked up nicely according to Tuesday's numbers and Clinton not stuck to his budget balancing, I think short rates would exceed long rates right now.
What does the playbook say after a giant move like this? Some want to take their winnings off the table. Never a quarrel with that concept, but it's not what the playbook says. Others would like to take this rally down to the small caps. Still others think it is time to exploit stocks that not only have been laggards, but losers.
You stick with winners. You stick with the stuff that is working. You go back to the themes that people feel comfortable with: the Net; networkers; software companies; drug companies; airlines; healthcare and healthcare consolidation plays; housing related appliances; entertainment and retail. Nothing fancy, please. These are winning sectors that will hold up well when the market takes a dip. It is what people will go back to buy if the market turns south for a couple of days. Don't make me choose one for you; get comfortable with a big cap stock you like and stick with it.
Last night on my
chat (transcripts will be up this morning) I was astonished how many people continue to want to play kooky names or names hard hit for good reasons because of East Asian shortfalls. Sure, maybe you will get an
, something where the fundamentals have changed for the better in the interim. But it is more than likely that you will sit out one of the better moves that we have had this decade with that wacky stuff. You don't want to do that. You want to go obvious and go namebrand. Don't out-think the rally. That's a cardinal sin. There is no penalty paid for buying stuff you heard of and know or like. Ever hear of
? (Just did that for Buffett fans.)
Still lost for stocks? Follow
advice -- pick some winners you like off the new high list. Heebner works harder than me; he's a great stock picker, but most important, he has an incredibly keen eye for the obvious -- and I don't mean that cynically. While others are trying to spot
Amalgamated National Gift Wrap and Packaging
Corp., he is in there buying winners he likes.
This morning all eyes will be on
. If I am right, the bears, who so desperately need this market down, might stop at nothing to knock this stock on its behind. You thought they pulled out the stops in
(see my piece
last week); now let's see what they do when they have a negative story to operate on.
For once I am off the firing line on this stock. I have no position and I will be asking questions of the AMAT management this morning on Squawk Box. As this is the first negative outlook we have heard from a major stock this week, we should find out what this rally is made of. If AMAT handles itself well on Squawk, I suspect this stock will just be a speedbump on the way to 9000...
Site was so jam-packed yesterday with good stories that Dave Kansas, our editor-in-chief, had to hold back some of my copy. How about that fabulous Wade Cook
story we ran? Wasn't that terrific? Got a dyn-o-mite letter of apology from Messrs. Kann and company at
Dow Jones, saying they were sorry and they should have listened to me. Just kidding. I see I am not the only one with a Goddess at house/work. That guy's got the Warrior Goddess. Good for him!!!
James J. Cramer is manager of a hedge fund and co-chairman of TheStreet.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Mr. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he welcomes your feedback, emailed to