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 ceaseless bad news on inventories,
- energy's temporary dip, and
- this tumultuous market.
for information on
, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
What's the Opposite of 'Goldilocks'?
Originally published on Tuesday, May 27, at 7:56 a.m.
Where are the inventory builds? In anything? Where are they? The U.S. economy now seems in perma-decline, yet there is no glut of anything but wood, and even that is in shorter supply than I thought.
The big tension in the economies, ours and worldwide, is that economies simply don't slow enough to rebuild anything.
While I have been the first to explain the irrelevance of inventory numbers domestically, just scoffing at both the Wednesday oil and Thursday natural gas numbers, there is a remarkable lack of build even with gasoline at $4. That shouldn't be happening. We should be able to catch our breath.
I know the
feels at fault for this, hence their endless "we're done" calls, which wreck the stock market each time, as it was wrecked this time around again. Believe me, if you take rates to 1%, you take the "
viability" off the table once and for all and make it just an earnings power story, which it probably is anyway.
I had not been in favor of any more rate cuts, but that looks like a wrong judgment. Not holding the door open produced the horrid results we just had last week.
Still, isn't it surprising that without strangely hot weather, with gasoline allegedly sky-high, employment teetering, real estate collapsing, we don't use less energy?
To me it is a sign of health and a sign of, well, weirdness. We should be well over the hump in a decline in everything. We should be up to our eyeballs in copper and lead and zinc. Instead, we still don't have the infrastructure in place to tap all we have worldwide. We should be able to hold down natural gas, as the pull to transfer from oil to natural gas hasn't happened yet.
But nothing works right. Nothing.
And so it goes. More pressure ahead. More upward pressure. No breath taken.
At least not yet.
So the worries about inflation do not abate and we can't get the new cycle going because of it.
At the time of publication, Cramer had no positions in the stocks mentioned.
Energy Will Come In but Not Crash
Originally published on Wednesday, May 28, at 8:45 a.m.
What is the right level for oil? Where should it be? Should it be at $100? Should it be at $120?
A lot of that depends on how you think we got here. If you think like the some of the testimony we have been hearing on the Hill, it's a combination of hedge funds who have embraced commodities as an asset class and hoard oil, and a lack of supply coupled with incessant demand.
If that's the case -- and I am not sure it is -- then the hedge funds will let loose some of their hoard if the price really breaks, as they will theoretically not give up the gains.
But what if it is not? What if the only real impact is on American driving, and American driving isn't enough to cause a decline in oil in even a severe cutback. From the beginning of this commodities run, I have cautioned that we are not the marginal buyer of any commodity and that extends to gasoline. Unless gasoline use falls off dramatically -- not 2% or 4%, but something in the 10% to 15% range -- I cannot imagine that it will have any impact at all on the price of oil. We aren't setting it.
That's why, as we go down, I am not thinking about a crash in the group or natural gas. Anything that has run parabolically, as oil has, typically crashes.
I don't think this one can crash, because the only component that can really be variable besides global demand is hedge fund/pension demand, and I don't think that they are willing to dump the asset wholesale or even cut it by more than a small factor.
That's why I once again say, let the energy stocks come in, take some off if you want to, but to give up on them is to bet on a collapse in oil that is not likely to come.
Previous selloffs of the magnitude I am expecting have produced roughly 15% declines. So if you take
has the quintessential average stock, you are looking at a return to roughly $82 or $83 on this scale. Again, worth dodging and coming back to. Just to be clear, I favor trimming the natural gas stocks, but less so than the majors, even though they are similarly overextended, because they are still growth entities with big finds that make a difference. The integrateds have no such finds and are hostage to brutal refinery margins.
The question is, can you handle the integrated hits, even if later on they produce a longer-term advance as we continue to run out of oil and the oil in the ground is worth a great deal?
My judgment is that such a decline will be too hard for most, and it is worth it to trim this group hard, which is something I have been reluctant to do. I have been using an ultimate $150 target because I believe that translates to massive investment in alternatives. But the spike, intraday, to $138 is pretty darned close to $150, and I don't want to overstay my welcome.
At the time of publication, Cramer had no positions in the stocks mentioned.
Playing the Topsy-Turvy Trading Game
Originally published on Thursday, May 29, at 1:38 p.m.
Here's an investment strategy for you: Take whatever was down yesterday and buy it today. Fund it with sales of yesterday's winners.
gets clocked yesterday? Pay up 4! Banks awful? Get down there and scoop up
. (Please run, don't walk, to Doug Kass' unbelievably variant view of
. He was dead right on the way down; his change is blaring in my head and should to you, too.)
been strong; great quarter? Sell.
been doggy; great quarter? Take it up 20 and change.
Or how about
National Oilwell Varco
? This one's been on a tear because of a belief that oil inventories would be down big. They were, but we are getting big selling anyway. Nothing acted worse than
. You could have made fortunes shorting these non-takeover-able stocks. Not today: You'd be creamed.
I was pulling what was left of my hair out buying
yesterday and was nearly sick at the relentless decline despite what I think is the likelihood of an SAB transaction, which Altria partially owns. Today it reacts
signals a deal.
And then there is the biggest conundrum. You couldn't touch the drug stocks yesterday; today,
-- a stock I own for
-- is soaring.
Of course, this is simply a deadly moment for anyone trying to outperform on a short-term basis. No one's that good. You give up exactly what you "made" yesterday and can't make it back today because of the cosmic shift.
So, what do you do? I like to prepare for the change by buying stocks getting hammered today. I am bidding for
. I want to sell, small, the stocks I have been buying down that are now turning, although I think more outperformance beckons.
The trick is to simply be where they ain't with buy orders, and be where they are with sell orders. Frontsies/backsies on a daily basis.
Counterintuitive, but dead right.
: Congrats to the
New York Stock Exchange
for going into commodities. I still like gold!
At the time of publication, Cramer was long Abbott, Freeport, Goldman and Altria.
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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