The move in the most downtrodden sectors of the market – think retail, banks and homebuilders – is so powerful that it’s lifting even the most mediocre stocks in those sectors. That was the basis of Friday’s Game Plan and Cramer used it to predict which stocks in those sectors he thinks will continue the run next week.
Now that interest rates are dramatically lower, money that was in cash is now flowing freely into stocks. That explains why this rally is so broad-based and it’s also why it doesn’t matter right now how poorly some of the actual companies are doing.
Take Wal-Mart, for instance. CEO Lee Scott has been a longstanding member of Cramer’s CEO Hall of Shame. But, in light of the new ethos of the market, even the poorly managed Wal-Mart is set to soar, Cramer said.
Agriculture and coal are both ramping, too. As Cramer said on Stop Trading!, railroads like CSX , Norfolk Southern , Burlington Northern and Union Pacific are a great way to get behind increased coal demand.
But Cramer saved his best trade for last: NYSE Euronext . The company is on fire even though the stock just looks flammable. But remember the adage that companies don’t matter right now as much as the strength of the move and NYX fits right in. Cramer would buy it ahead of earnings on Monday if it’s still at the current price.
Trust the playbook and trust the momentum behind the rally. The worst stocks of yesterday are poised to be some of the best of tomorrow – even if the companies aren’t.
Oh, and the Microsoft /Yahoo deal? It’s going to happen, Cramer said. Mr. Softee is a buy under $30.
Jim's charitable trust owns NYSE Euronext and Citigroup.
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