Cramer's Game Plan: Mid-Week Sell-Off Ahead?
Next week investors could find themselves somewhat battered and bruised. Cramer sees the potential for problems around mid-week.
Of course a sell-off simply translates into opportunity as far as Jim Cramer is concerned.
Following are the catalysts the Mad Money host thinks could move stocks and perhaps the entire market through Friday May 3.
MONDAY APRIL 29
On Monday Cramer will have food on the brain with Buffalo Wild Wings scheduled to report earnings. Shares have surged about 25 percent over the past three months and Cramer will be looking to see if the earnings confirm the stock's dramatic run. (On Thursday April 25, Cramer called BWLD, "A Great Restaurant Growth Story." Click on the link for more.)
In addition Cramer will be watching housing as Masco delivers. "This is a tough call," said Cramer. The Mad Money host is an advocate of housing plays but said a quarter of this company's revenues come from overseas. "Let's just say Masco is less than my favorite," Cramer said.
TUESDAY APRIL 30
The health of China's economy comes into play on Tuesday. "Truck engine maker Cummins reports and despite its location in Columbus, Indiana, it remains a top exporter to China. I suspect some softness here, but not enough to run from," Cramer said.
Also drug stocks take center stage as Pfizer reports earnings. "I think we'll hear many good things," Cramer said. "It remains a terrific slower growth vehicle that's negotiating the patent cliff of Lipitor, the giant anti-cholesterol agent, extremely well."
In addition, Pfizer's new spin-off reports, a company called Zoetis, formerly Pfizer's animal health division. "I think they deliver a good quarter, animal health is a red-hot business," Cramer said.
Shopping centers REITs will also demand attention as Tanger Factory Outlet reports after the close. "I believe this will be a case of slow and steady winning the race," said Cramer. Tanger has consistently delivered both earnings increases and dividend boosts."
Read More from Mad Money with Jim Cramer:
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WEDNESDAY MAY 1
In the new month, drug stocks will immediately steal the spotlight as Allergan reports. Cramer said the pharmaceutical company has tremendous growth because of its tremendous business model. "However, it often sells off right when it reports," he added."So I would wait until we hear more before buying."
Also, Cramer intended to take a hard look at consumer staples stock Clorox, which reports on Tuesday. It's rallied 18% ytd, as investor chase yield. "I think it will be hard for Clorox to follow up on that stock performance, so if you don't own Clorox I would wait until after it reports to initiate a new position," Cramer said.
In addition Cramer will be reviewing his spec plays. "On Wednesday, we'll hear from Radian, the mortgage insurance firm. This remains one of my favorite spec stocks," Cramer said. "This insurer has been a terrific play on the return of housing and I think we're in the early innings given that Radian's primary competitor, the FHA is rapidly pulling out of the insurance business."
But perhaps nothing is more important on Wednesday than the statement released by the Federal Reserve at the conclusion of the FOMC meeting. "I find it hard to believe the Fed can take its foot away from the bond buying gas pedal," Cramer said.
However, Cramer also said not to be surprised by a sell-off. "I expect to hear from a host of people who will say, 'how does the Fed end this nonsense,' and they will either be short this stock market or have very little invested and need it go lower."
In addition the market hears from the ECB, as well. "There are expectations in the market that the Europeans cut rates. They need to, badly. If they don't then I suspect our market will surely sell-off Thursday morning."
THURSDAY MAY 2
If the market sells-off Cramer will be looking for opportunities – one of which may be AIG, which reports after the bell on Thursday. "Bob Benmosche, the terrific CEO of AIG, has been knocking it out of the park consistently, delivering value ever since he came into the place," said Cramer. "I expect a very good report. If you can get it near $40, go for it."
The auto trade will also land center stage as General Motors reports earnings. "Europe, hurt Ford and I expect it will do the same to GM," said Cramer. "Nonetheless, I wonder if GM doesn't surprise to the upside or that it offers you enough second half hope that it's worth owning."
Also, one of Cramer's favorite take-out candidates reports Thursday. "I like Alliant. The defense companies have all delivered some excellent numbers. I think ATK might do the same," Cramer said.
On top of all that, Cramer will also be watching social media. "We hear from LinkedIn on Thursday. Of all the companies in social media, I think this one has been the standout. I think that its freemium model, some paid and some free, is the best one on the web. The space is risky but because LinkedIn surprises to the upside so consistently I would be willing to buy some deep in the money call options out several months ahead of the quarter."
FRIDAY MAY 3
The granddaddy of all economic numbers will be released on Friday—the jobs report.
"Employment was pretty darned weak last month," Cramer reminded. "Judging by all of the weaker data we've gotten in April I don't think anyone's looking for a terrific number, and I don't think we will get one. This report is never a non-event. But after last month, I think the Street is pretty much ready for anything the Labor Department releases," Cramer said.
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