Contrary to common belief, the "big shake-ups" at
, the good numbers from
and the better numbers from
are not events that are driving the market this week, Jim Cramer said on his
"RealMoney" radio show Tuesday.
It is actually the options on ETFs and how the various indices are working that are causing moves in the market, he said.
Cramer owns Bristol-Myers and Goldman Sachs for his charitable trust,
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This means "the normal rules of a good company plus good results equals a good stock price, are not applying this week," Cramer said. Instead, the rally is index related and not stock specific, he said.
Looking at housing, Cramer said that despite all the negative news on the sector, "homebuilding stocks are not going down." In fact, some such as
are going up.
"The homebuilding stocks are rallying furiously because two bubbles, that factor heavily in the housing sector have burst," Cramer said.
First, the costs of commodities that make up the material to build a home, such as copper, steel, nickel and oil, have gone down, he said. In addition, there is a slowdown in the number of homes being built.
"With the economy and jobs and the population growing -- that should take out the excess housing inventory," Cramer said, adding that the bubbles bursting is a signal that the
might be done raising rates.
Cramer said he is calling a bottom in homebuilders.
"SUV owners are doing a happy dance as they go to the gas pump because the price of gasoline has fallen dramatically. Consequently so has the price of oil," Cramer said.
But how far down will oil really go? he asked.
as an example, Cramer said that although the company delivers its numbers selling at nine times next year's earnings and growing at 13%, "if oil slides, British Petroleum isn't going to grow at 13% or even at all. Therefore P/E analysis is irrelevant."
In addition, BP is too big to be taken over, Cramer said. It's worth more as "a whole company than a fragmented one."
Cramer also does not feel the company can boost its stock with buybacks because "there's too much floating out there." Therefore the only thing for British Petroleum to do is to raise its dividend to create a bottom in its stock, Cramer said.
However, while a dividend boost might stop the slide in oil, he doesn't believe oil companies will do this until "there's a new age of profitability out there, which means a threat to the oil supply due to terrorism or some geopolitical trouble, coupled with an incredible decline in the reserves," Cramer said.
To see the most recent edition of The RealMoney Radio Recap in its entirety, please click here. This recap is published every day around 3 p.m. ET.
At the time of publication, Cramer was long Bristol-Myers Squibb and Goldman Sachs.
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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