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NEW YORK ( TheStreet) -- Quoting Sir Isaac Newton, Jim Cramer told the viewers of his "Mad Money" TV show Friday that "what goes up, must come down." He said every stock, good and bad, traded lower in lock step today, but the good news is "we will get over it." Cramer said the markets name seem schizophrenic, with giant up days followed by giant down one, but in actuality, it makes perfect sense. He said the markets simply ran to far, too fast, and it's unrealistic to think they'd just keep on going forever. Looking at things objectively, Cramer said the markets just gave back most of their gains from the seven-day rally, nothing more. But despite the market's miserable action today, Cramer said the week was still filled with good things, like the strengthening euro, which will help earnings of U.S. companies, and financial reforms were finally passed into law, ending months of nervous speculation. And of course, there was the capping of the Gulf oil spill which, at least for the moment, puts an end to that crisis as well, hesaid. Cramer still advised investors to use extreme caution when investing in this market. He said that while things are getting better, and not worse, the markets are still likely to have big swings like we saw today. Eventually, he said, the naysayers will go too far though, and when stocks get oversold, it will be time to start buying again.
Next Week's Game PlanFor next week's trading, Cramer told viewers that they should be listening to, but not trading, several key conference calls as earnings season gets underway. Why no trading? It's because trading during earnings season is a fool's game, and he can prove it, he said. Cramer unveiled his personal "Box o' Trading Losses" from his days at his hedge fund. He explained that every time he experienced a loss greater than $10,000, he put it in the box, then reviewed it later to look for patterns. What did the box reveal? That information comes too quickly during earnings, and it's impossible to keep up and get it right. So rather than trading, Cramer said he'll be listening to IBM's ( IBM) conference call on Monday to see if he should buy more Accenture ( ACN) for his charitable trust, Action Alerts PLUS. On Tuesday, Cramer said Pepsico ( PEP) will provide a read on consumer stocks, while United Technologies ( UTX) will show how the world's economies are doing on Wednesday. "These companies do the research for you," he explained. On Thursday, Cramer said that Caterpillar ( CAT) is the call to listen to, as they provide guidance on the infrastructure and mining industries, as well as a world view on housing, stimulus and more. Then on Friday, there's Schlumberger ( SLB), the perfect company for a read on oil for the second half of the year, as well as an expert take on BP's ( BP) handling of the oil spill. Finally, Cramer said he'll be listening to both AT&T ( T) on Thursday and Verizon ( VZ) on Friday for the latest take on the smartphone wars.
Steel Maker ReboundsConcluding his "Biggest Loser" series of beaten down stocks poised to turn around in the second half of 2010, Cramer highlighted AK Steel ( AKS), a much hated steel maker whose shares have fallen 37% so far this year. Cramer said he's historically panned AK Steel because the company is not vertically integrated, leaving it vulnerable to higher iron-ore prices, and because it hasn't been a big international player, leaving it susceptible to the lagging U.S. economy. Cramer said he's also been wary of the company's balance sheet, which has been ballooning with legacy costs. But as the facts change, Cramer said he changes his mind, which is precisely what happened with AK Steel. He cautioned that the company is likely to report a disappointing quarter on July 27, but after that, things start looking a lot rosier for the company. Cramer explained that AK Steel has reduced its headcount by 30%, while still maintaining its output, and has reduced its legacy costs from $40 per ton produced to just $7 per ton, a huge improvement. The company also used $2 billion of internal cash to help sure up its balance sheet, all while maintaining its 1.5% dividend. Additionally, with iron-ore prices plummeting, Cramer said margins will be improving for AK, and with the economy recovering, demand should also swing in the company's favor. He said with the stock already down big on the year, there's not much downside risk left, but the upside just got a lot more enticing.