"We're not done going down," Jim Cramer cautioned viewers of his "Mad Money" TV show Tuesday. He said the markets are locked in a range now that could see the Dow Jones Industrials slip to the high 7,000's before it begins to recover. Why have the markets fizzled out? Cramer placed blame on the oil patch, one of the three leaders, along with technology and the financials, that help propel the market higher since March. He said with the news of price manipulation in the oil futures markets, investors just can't trust the price of oil right now, nor the companies that go along with it.
A Speculative Retail PlayOn the heels of last week's takeover bid for retailer Tween Brands ( TWB), Cramer went shopping for the next undervalued retailer that could be ringing up profits for investors. His recommendation? It's Charming Shoppes ( CHRS), purveyors of the Lane Bryant and Fashion Bug chains, as the prefect speculative retail play. According to Cramer, Charming Shoppes is a broken stock, but not a broken company. The company is not only taking advantage of lower gas prices to spur sales, but is also the market leader in plus size women's apparel, a segment that continues to grow with America's waistlines. Additionally, Cramer said Charming Shoppes is also a turnaround story. Although Charming may be a $3 stock, the company has $1.32 in cash on the books. And while same store sales were down 13% in its last quarter, operating income was flat, with improving margins. Cramer said the company's new management team is aggressively cutting both costs and inventory. Cramer said Charming Shoppes has two ways to win. The company has both improving fundamentals, and is a ripe takeover target for other struggling retailers.
Off the ChartsCramer went head to head with colleague Dan Fitzpatrick over the chart of spice maker McCormick ( MKC). According to Fitzpatrick, the chart of McCormick has turned bullish, with the stock breaking its 200-day moving average on high volume. After eight months of trading sideways, the once resistance level is now offering support for the stock. But Cramer disagreed, stating that there's a lot not to love about McCormick's latest quarter. According to Cramer, McCormick has disappointing sales across the board, with currency translation taking the wind out of the company's profits. Cramer said he's also worried about Wal-Mart ( WMT) taking it's private label spices to the national market and crushing McCormick's margins even further. Cramer said in his opinion, the recent buyers of McCormick's stock are betting on the global economy worsening and defensive stocks coming back into vogue. But if that were the case, Cramer said he's rather be in higher yielding and more profitable food stocks, like Kraft ( KFT), General Mills ( GIS), which he also owns for his