The bears sniffed victory. They had the whole market inches from their jaws, savoring the bleeding .coms, saliva dripping from their gums at the prospect of sampling all of those delicious young growth stocks.
And then late last week, Britain sold all that gold and the bears once again came up empty handed.
If you want to look at what turned this market bullish after what looked like certain doom at the paws of the bears, it has to be the shellacking of the gold stocks. Last week, all I heard from options traders was, "Hey, smart guys are buying
calls." Or "
got nothing but call buyers -- all the right guys."
That's always supposed to be a sign of a terrible market. Gold going up is a sign that the lunatics have taken over the asylum. Gold going up means game over. It signifies that people would rather own something that shines in the ground than something that grows from the ground up.
But the move was a false one. Another false one, just like all of the others this decade, and these flimsy stocks came crashing down, bringing with them the big bad bear case.
For as long as I have been in the business, there has been this intelligentsia/hedge fund/media love for the gold stocks. It's one thing to be in cash and another to be short, but when you are in gold, that means you believe in chaos. Gold is a vote for hyperinflation, for the coming wheelbarrows of dollars and marks and pounds. Gold buying mocks the rest of investments.
And gold has been wrong. Dead wrong. Just as it was last week.
For a long time, I thought the intelligentsia/hedge fund/media troika really believed in the gold metal. But like the move into the stocks last week, the love affair is phony -- even among its adherents. These days, people buy calls on gold stocks in order to get them moving so that the media will pick up on it and sow doubt in the minds of buyers and believers. Gold calls have become nothing more than a cynical trick to get commentators to call for the end of the bull. Yeah, gold's a vote for nihilism.
And, in this tape, nihilism doesn't make you a dime.
Bear trap alert! My father, of National Gift Wrap & Box Co. fame, will be by my side at my turret today, along with my sister, Nan. Be careful -- he's never been here on a down day.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. 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 invites you to comment on his column at