Here's my Dow 10,000 story to be distributed to all newswires and television shows:
The Dow blew through the 10,000 milestone today, but traders dismissed the 278-point rally as much ado about nothing, pointing to the disappointing 3-to-1 breadth for the hollow performance.
Transports crept up only 162 points, well below the Dow's move, as
failed to budge more than 3 points each.
The utility average tacked on a mere 5 points, as that interest-rate-sensitive index could not keep pace with the either the Dow or the bonds, which rose less than a point in light trading. (Interest rates go way up when bond prices go down badly.)
"The volume was light for a plus-278 day," says Hiam Short, floor trader for
Bagem Gunem & Liquidatem
. "You could not be impressed with the increase, given that there were only 200 new highs, many fewer than one would expect." Short explains that the negativity stemming from continued worries over inflation and disappointing earnings shows no let-up. Only an absence of earnings blow-ups could explain the inexplicable strength of the rally.
Traders point to the inability of the
, which rallied 58 points, to surpass the Dow and are less than thrilled with the failure of
to reach new highs.
The highflying Internet sector continued to rally, with
each rallying 10, but these gains pale compared to the strength of the Net stocks that was routine just a few months ago.
Gold stocks fell fractionally, continuing to spur speculation that the
will have to tighten in order to send stocks lower. The less-than-sharp 50-cent decline in oil, after it hit $15 a barrel, reignited inflation fears.
"I don't expect to see any follow-through tomorrow," says Whitefish Boggs, an even-handed money manager with no ax to grind. "Considering the disappointing action today, I believe the correction will continue." Boggs cites the inability of 3,000 issues to rally all at once as still one more reason for the poor action. He continues to suggest a giant cash position as well as a sizable silver allocation in order to best prepare for the coming thermonuclear war.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At the time of publication, the fund was long Microsoft, AOL and Intel, but positions can 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 by sending an email to firstname.lastname@example.org.