When the cyclicals steamroll, get out of the way. For the past month, they have steamrolled downhill, wiping out everyone and everything in their path. Now they have bottomed, and you have to love the trading action. They are steamrolling uphill now and it feels great. All the strength we are seeing in the market is in the cyclicals. And for a couple of days they will work as a trade, maybe even work big.
What starts these rallies? Usually it is pretty whimsical. The excuse today is the
number. That halo will last the rest of the week as the cyclical analysts, all of who have been huddled in their trenches avoiding the shelling, will now come out tomorrow and reiterate their buys. It is a time-honored cycle. Don't mess with it.
As we are seeing price increases in resins and wallboard, you can pretty much take your pick of the cyclical litter.
But be forewarned, these stocks will stop working a few weeks after a tightening. They will collapse again. They are strictly for a trade.
Please don't email me and tell me that this time it is different. I will simply fob you off to the e-circular file.
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