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Jim Cramer fills his blog on RealMoney 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:
  • broken sentiment indicators,
  • playing volatility, and
  • the changing face of equities.
Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.

Sentiment Can't Measure This Broken Market

Originally published on Tuesday, Oct. 15, at 4:23 p.m. EDT

All my career, the sentiment indicators have worked. When you get anything near minus 10 on the oscillator, you have to be silly not to buy. When you get anything approximating 35% bulls on the Investors Intelligence survey, you have to buy.

We have almost double that negative on the oscillator and half as many bulls as that pathetic number.

Sentiment has become meaningless. It is incredible.

If we are going into a severe recession, some of the selling makes sense, but not all of it. As we pull back to 8500 on the Dow, we will be looking at stocks that are yielding 6% to 7% that are solid and can't be shaken. We will be finding stocks at prices that we will look back and think it was impossible to believe.

And then there will be another cohort where we will buy and then watch them go down again, because business is so soft.

I want to reiterate that the stock market for now is just plain broken. You can't have Occidental Petroleum ( OXY) down 15% like it is nothing. The company should be losing money with that kind of decline. Remember when I said on Monday that you can't have Exxon Mobil ( XOM) go up 10 because it can go down 10 just as easily?

Well, here we go.

The market is just plain irrational.

That said, it is time more than ever to pick those stocks that make no sense down here, keeping in mind that there is no way interest rates are headed up and people will need good yields.

Here's Kinder Morgan Partners ( KMP) again at 8%. Philip Morris ( PM), the faster grower of the tobaccos, yielding 5%! Halliburton ( HAL) at six times earnings. McDonald's ( MCD) with a decent yield giving up everything it has made during this great period of earnings.

Yet in each of those cases I think there is more downside! More downside!

What else can I say, these stocks have nothing to do with housing, nothing to do with the Fed's plans or failures. And it doesn't matter.

Let the stocks come down. Pick and let come down. We are on target to touch base at 8400 again. You buy some here and then leave room for that price and then the 7900 level that we triggered on Friday. By then, so many of these stocks will have fabulous yields and values that it will simply be too difficult to pass them up.

At the time of publication, Cramer had no positions in stocks mentioned.

This Time We're Braced For Wild Swings

Originally published on Wednesday, Oct. 15, at 1:03 p.m. EDT Just can't be as fearful this time around. Sure, it is jarring. For example, we have Jones Apparel (JNY) down $3.50 on a $13 basis -- that's incredible. We have Freeport-McMoRan (FCX) yielding 5.6% and Chevron (CVX) sporting a 4% yield, and Joy Global (JOYG) worth just a few hundred million more than the stock it is buying back. We have Eaton (ETN) yielding 4.37% and Caterpillar (CAT) almost at 4%.

So why is this better than what happened when we got a lot of panic lows, the day of Oct. 10, because that was a day when we thought the banks were going under?

Now we know they are not. So we are better off. We are better off. We are better off.

I repeat that because the bank plan is a game-changer, and when we were under 9000 last time it was because we thought Morgan Stanley (MS) would go under, and we believed that Goldman Sachs (GS) could be next and that they were about to do a Kesselschlacht -- encirclement and destruction -- on Citigroup (C).

I am now thinking that the Oct. 10 lows that keep surfacing when you hit up stocks can hold for many stocks. Those lows were hit so swiftly and with such brevity that I think we have to bid at or near those levels for anything that was sold into the absurd Monday rally.

For example, I like Chevron, and I wanted very much to buy it at $60-$61 because of that 4% yield. The stock then rallied to $70! That's just crazy: Chevron can't rally up 10 and stay up 10. The only reason Chevron can be down 7 and be a buy is that yield, I would not buy the others that are down like this, because they have no yield support.

I am not as sure of the non-dividend-payers, because they are more leaps of faith right now, and oil, the commodity, keeps going down. They probably have to be bought only if we get down to 900 on the S&P 500 and 8500 on the Dow. It is also possible that the Friday morning price, that ephemeral price, could be hit again, a price that is the equivalent of about 8000 on the Dow. More room has to be left for that.

Of course, we have some worse earnings report than we knew we had last week. We have a further decline in the Baltic Dry Index continuing to fall at an incredible rate -- hence why the cyclicals have no traction. We have commodities continuing to plummet, all signs of a severe recession.

But if you are buying now, you have to be thinking that at some point within the next year these companies will be in better shape, because the industrial economy will begin to reflect some of the money that's endlessly being pumped into the system.

It is simply a better time to buy than when we hit these levels last time.

Oh, and I am not going back from when I said at Dow 11,000 on Sept. 19 that you should sell 20%, or from last Monday's call that if you need the money for the next five years, you should make sales.

I am simply saying that we are getting closer to where we were when we bounced, and we can't be as scared as we were last time, because the European bank plan will make the recession deep but not endless.

Pick, as I am, at the stocks that are about at the panic low levels.

And then wait for more panic lows. If we don't get 'em, we pass on more buys.

At the time of publication, Cramer was long Chevron, Freeport-McMoRan, Goldman Sachs and Morgan Stanley.

The Blue-Chip Market Is Over

Originally published on Friday, Oct. 13, at 2:43 p.m. EDT

Does the market work? Is it worthwhile as a way to make money? Can it be counted on to do what it used to do, which is create wealth by investing in good companies and holding them over time?

This, not the current rally or last week's selloff, is the key question. We are perfectly willing to say "the selling is over," and many people want to pronounce an all-clear.

I think we have entered into a particularly difficult moment for equities. They have made us no money as an asset class for a decade. They have become, on a daily basis, simply impossible to game. The notion of "buy and hold" has been decimated by the action as buying and holding even the most blue of "blue-chips" has become a total loser's game.

And we are soon about to see the recognition that you will not be able to retire on stocks, not able to retire with a 401(k) that's so, so low.

There are plenty of opportunities to rent stocks after they have been hammered, but to just own them is something that may very well be impractical as a way to make long-term money.

We hear endlessly that we have to stay the course. But if staying the course means losing 30% or 40% in a short period of time, it is becoming hard to justify that large a commitment to equities.

I know we have been in a horrible bear market, and I know it will end. I know that the medicine the governments are producing will avert a severe depression.

But I have been struck with the irrationality of stocks and the subsequent lack of faith we have in them and the skepticism that must be shown this asset class.

That doesn't mean you can't buy stocks when they get to liquidation values or when dividends make them an attractive asset vs. fixed income. But if you don't come through this period with a notion that stocks, en masse, have failed us, I don't think you actually care about how you do and have simply been brainwashed that what matters is holding them, not profiting from them.
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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 Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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