Cramer on BloggingStocks: Eaton's a sign the bulls are in charge


TheStreet.com's Jim Cramer says all of Eaton's businesses declined; the stock, however, gapped and never looked back.

The Eaton (NYSE: ETN) (Cramer's Take) quarter was the tell Monday. Even more than the PPG Industries (NYSE: PPG) (Cramer's Take) quarter was last week.

In a vacuum, Eaton didn't do well. Its businesses all declined severely. Europe's bad, maybe even getting worse. The cash flow is not so hot. The outlook is really pretty grim. They didn't even give you the "mildly improved" language that rocketed PPG. I worried about the dividend immediately.

But the stock? It was up from the get-go. There wasn't enough bad to make the sellers come out of the woodwork this close to when things could improve. There was no decline from the first quarter. So without natural sellers, the shorts had to come in and cover -- and there are shorts on every industrial, every one.

So the stock gaps and never looks back.

After four weeks of pain, we are back in fierce bull-market mode.

We know this market can change on a dime. But the risk-reward has really shifted radically in favor of the bulls. Eaton, on that info, should have been down 3. Instead it goes up 3.

Which leads me to the obvious conclusion: What would have happened if Eaton had been good?

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 PPG Industries.

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Last updated: February 13, 2012: 06:32 AM

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