Cramer's 'Mad Money' Recap: Market Takes a Breather (Final)

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NEW YORK ( TheStreet) - "This market's run out of gas," Jim Cramer told the viewers of his "Mad Money" TV show Monday.

He said regardless of what happens with the rest of earnings season, the market is getting ready to take a breather.

According to Cramer, there's only one explanation for why great earnings from companies like Corning ( GLW), Verizon ( VZ) and Honeywell ( HON), a stock which Cramer owns for his charitable trust, Action Alerts PLUS, were met with selloffs. "The markets have gone up as far as they can" and now they're overbought and poised for a 3% to 5% decline, he said.

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Cramer said that he expects a gradual selloff, and not a vicious one. He said that since money managers are still not fully invested, the big money will still be buying in and providing a cushion as the markets decline.

Where to invest? Cramer said he's put his money in banks like Wells Fargo ( WFC) and Bank Of America ( BAC), two stocks which Cramer owns for his charitable trust, Action Alerts PLUS. The banks haven't done much recently, said Cramer, and it's hard for them to disappoint.

Cramer said he'd also look toward healthcare stocks. He said this group, which is underinvested by money managers, should have room to run. Cramer likes Abbott Labs ( ABT) and Bristol-Myers Squibb ( BMY), two more Action Alerts Plus names.

Cramer had words of caution for the rails and industrial stocks, two groups which had big runs, and will be vulnerable to the selloff. He said he'd also said to stay clear of the retailers, and even some technology stocks, as he expects all of them to drift lower before regaining their momentum.

Cramer's Capitalist Manifesto

What's the formula for bringing jobs back to America? Cramer outlined his "Capitalist Manifesto," an eight-point plan that he said you won't hear anywhere else.

1. Embrace natural gas: Create a network of natural gas pipelines and subsidize natural gas vehicles.

2. Build infrastructure: Rebuild everything, from roads and bridges to waterways and runways. Put some serious money back into our country.

3. Fix healthcare: The government needs to create three nationally competing healthcare providers and subsidize all of them to increase competition and bring down prices.

4. Bring home the troops: Reduce the number of troops in countries like Germany, Japan and South Korea and put the Corp of Engineers to work at home.

5. Pay a bounty: Pay companies a bounty for every American they hire.

6. Serious solar: Get serious about solar energy and subsidize a solar panel for every home.

7. Build high-speed trains: Just about every other country has one, and they create jobs. Build a high-speed line from Maine to Florida and another across the country.

8. Stop pushing card-check unions: No company want to hire with the threat of unions looming. The economy just can't take the hit right now.

Tech Rally

What's the takeaway from the Nasdaq's record setting 12-day winning streak? Cramer said if history is your guide, it's a multi-year tech rally!

Cramer compared the index's recent run with similar moves in 1992 and 1996. He said each of these multi-year moves started with new secular growth trends, and a big 11-day plus rally.

Cramer said in 1992, the tech rally was sparked by the notion of a computer on every desk. Lead by Microsoft ( MSFT) and Intel ( INTL), Cramer said the 13-day rally saw a gain of 13%, but continued for a 27.7% gain two years later.

In 1996, the Internet was becoming all the rage, with hot IPOs from companies like Netscape and Yahoo! ( YHOO). The Nasdaq's 11-day rally then saw a gain of 7%, but then continued to see it up 37% just one year later.

Cramer said the same thing is happening today, as the mobile Internet and smartphone revolution is upon us. He said the recent 12-day rally that ended last week saw the average up 13%, but he expects this is just the beginning. Cramer remained bullish on companies like Apple ( AAPL), along with Research In Motion ( RIMM) and component maker Qualcomm ( QCOM), a stock which Cramer owns for his charitable trust, Action Alerts PLUS.

Cramer said these companies could be the Cisco's ( CSCO) of yesteryear, back when the company saw an 803% gain. Cramer also owns Cisco for Action Alerts PLUS.

Transocean's Rise

In his "Eureka Moment" segment, Cramer examined the trading action in the oil services sector from last Friday, and discovered something surprising.

Cramer said typically, the oil services group cannot rally without the participation of drilling giant Schlumberger ( SLB). Yet during the company's conference call last Friday, the stock of rival Transocean ( RIG) began to rally, all by itself.

Upon closer examination, Cramer discovered that on the Schlumberger call, an analyst asked about deep-water drilling, Transocean's specialty. Company executives called the deep water segment "surprisingly resilient" at 1:30pm EST, the exact time that Transocean stock began to rally.

Cramer said Transocean has now broken away from the oil service pack, and should remain stronger than the group until it reports its earnings in August.

Lightning Round

Cramer was bullish on Gilead Sciences ( GILD), Celgene ( CELG), ARM Holdings ( ARMH), Research In Motion ( RIMM), Bank of America ( BAC) and Starent Networks ( STAR).

He was bearish on Geron ( GERN), Palm ( PALM), CKX Inc ( CKXE) and Thompson Creek Metal ( TC).

--Reported by Scott Rutt in Washington D.C.

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At the time of publication, Cramer was long Bank of America, Wells Fargo, Abbott Labs, Bristol-Myers Squibb, Honeywell, Qualcomm, Cisco, Gilead Sciences.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money."

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Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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