We looked so great Friday. We looked so terrible yesterday. Why is that?
The shorts covered Friday ahead of the bank plan. They knew there was nothing that Tim Geithner could say, not after the buildup, that would keep them from rampaging after, but they had to have the ammo, and they didn't want to have to scramble and double-short.
In other words, they took profits on Friday, and then they came in flying yesterday. They came in with everything, every double-short instrument and every put that could be purchased on the usual suspects, plus they pushed down the S&P and they went after the staples with a vengeance.
To me, the banks were goners no matter what unless Geithner had said, "We love Wells Fargo (NYSE: WFC) (Cramer's Take) and think it is a $25 stock so we are tendering for it there."
The staples are a tougher call, although they're understandable. We don't have any earnings momentum and we have multiple compression galore, so if Procter & Gamble (NYSE: PG) (Cramer's Take) has a 13 multiple and a declining earnings profile, why should I keep buying companies that aren't as good, like Heinz (NYSE: HNZ) (Cramer's Take) and Kellogg (NYSE: K) (Cramer's Take), especially when Citi says the biggest food price war in history is coming, led by Wal-Mart (NYSE: WMT) (Cramer's Take), which, by the way, is laying off people!
It didn't help, of course, that we are in a moment where oil has to hold $40 or the ultra bear oil sellers come in with guns blazing taking the group back to the lows.
Not even Intel's (NASDAQ: INTC) (Cramer's Take) reckless spending announcement could help!
I think it was overdone. I don't like this market when it is high and overbought, and I do like it when it is low and oversold.
Unfortunately it is neither low enough or oversold enough to make it enticing enough to do anything but pick, but not sell. We've come down enough to eliminate that option.
Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long Wells Fargo, Procter & Gamble and Wal-Mart.
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Reader Comments (Page 1 of 1)
2-11-2009 @ 11:33AM
beachpaul said...
We are right where we have been. Dancing around DOW 8 thou. Buy, if or when it drifts to 7400 again. Other wise it is just play time. Maybe we should all just take a trip to China so we can see first hand how poor and filthy the place really is. When we get back, maybe the DOW will be be at 82 thou. again.
2-11-2009 @ 11:34AM
BHarrison said...
Isn't a big part of the problem with the market the "confusion" and LACK of INTEGRITY that has been created by the government's continued infusion of BILLIONS of dollars into the FIs and the corporations? Full disclosure and transparencies ahve not been provided. We have DEFLATION, parctically ZERO interests/RoI on investments, declining markets projected for another 10% to 30% or more devaluations before the end of 2009, declining consumer spending, rampantly increasing unemployment, etc., etc.
It is past time for the "REGULATED Free Market Economy work these matters out . . . but the problem is that Congress has not developed and implemented any prudent and reasonable NEW regulations and effective overrsights. No recovery will be possible under these conditions.
What reasonable and prudent person is going to invest under these conditions. The only market activity is basically from the "insiders" working short selling schemes as the market slowly works it way to the bottom. (I think that I will hold onto my cash until we eventually hit the bottom, and recovery can start.)
2-11-2009 @ 12:50PM
David said...
Anyone that takes any stock in what the two biggest Wall Street shills have to say, Kudlow and Cramer, should have their head examined. These guys have nothing to offer but wishful thinking they convert into recommendations.