Cramer: Is the Correction Over?
Cramer was right about the most recent sell-off: He said it would be shallow, and it was. Note the Dow’s 83-point rally on Tuesday after a brief 3% dip as vindication of his call.
The bears must be stunned and confused – flummoxed even. Just yesterday they could have pointed to what seemed like a long list of negatives for the market: a weakened consumer, no back-to-school season for retailers, tech’s stalling out, China’s disappearance, credit-card defaults, cash for clunkers cannibalizing what little money people had to spend on other items and cars in the future, and President Obama’s plans to “socialize” medicine.
Today? Target and Home Depot joined Kohl’s and Walmart to say that sales and profits are getting bigger. Walmart and Target, “the two biggest back-to-school stores in the country,” as Cramer called them, both said they were encouraged by this season.
Then there’s tech. Apple closed $4 higher on Tuesday, as the iPhone seemed to grow in dominance in Canada, Europe and Japan. And the revolutionary handset hasn’t even reached China yet. Cramer also mentioned the good quarter that Hewlett-Packard reported after the bell.
The last three cornerstones of the bear thesis have fallen apart, too. Citigroup and American Express announced that credit-card defaults are going down. GM is putting more people to work building cars, and Ford’s raising production for 2009, neither of which would happen if cash for clunkers wasn't working as intended. And the public-option insurance plan that Obama wanted seems to be off the bargaining table. That’s good news for Unitedhealth , Aetna , Cigna and Humana .
These events turned bears back into bulls, Cramer said, and it’s the reason the Dow rallied today.
“Every argument the bears had for selling,” Cramer said, “has been totally rebutted by this great market.”
Cramer’s charitable trust owns Hewlett-Packard and Home Depot.
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