Cramer: Charts Point to Multiple Bull Markets
“The bears are on the run,” Cramer said during Monday’s Mad Money.
According to the technicals, they’ve got nowhere to hide. Cramer said that the charts of sector on top of sector are signaling true signs of strength, and many of them depend on discretionary spending. So something is happening among consumers, it seems. Something that’s prompting them to spend.
These charts seem to be pointing to the end – finally – of health care and its affect on the markets. Not to mention the anti-business bias from Congress. If Verizon, Deere and Caterpillar can take the hits they have and still power higher, Cramer said, then maybe Washington just isn’t that important. Maybe the recovery will be incredibly strong and we can expect some job growth.
And the other lesson the charts had to offer? This isn’t one bull market at work – it’s many. Cramer on Monday highlighted the top 10:
First, retail. Cramer has spent a lot of time on this sector, most recently covering the bull market in shoe stocks like Nike . But apparel makers like Urban Outfitters are doing well, too. And the same goes for electronics stores such as Radio Shack and even high-end outfits like Tiffany. If the consumer wasn’t spending, Cramer said, then these stocks wouldn’t be hitting new highs.
Second is the food business, namely restaurants. Brinker, Darden, Yum! and The Cheesecake Factory all said that Americans are eating out again.
Apparently they're hitting the open road as well, because number three is travel and leisure. Everything from AMR and Continental to Royal Caribbean and Carnival – and hotels Marriott and Starwood – are on fire, Cramer said.
The jump in air travel translates into a bull market for aerospace, as the airlines presently don’t have enough planes to handle their new customers. That explains the moves in Boeing , Honeywell International, Goodrich and others.
The industrials are making their presence known as well. Eaton, Caterpillar and 3M are among a group of companies that should be dreading the Obama administration, Cramer said, but are doing anything but.
Part of the driving force behind the industrials comes from the autos, which we can see from ramping names like Johnson Controls, Magna International and Autozone. Cramer said he expects 12 million new cars built this year, up 50% from 2009.
The shippers are number seven, because the Johnson Controls and Autozones of the world have to deliver their parts. Hence the rallies in FedEx , UPS and the rails.
Cramer also said that anything with the word “health” in it works now, whether it’s a real estate investment trust, testing company or health maintenance organization. He thinks the new reform law means good things for Lincare, too, because it seems the government is going to back homecare companies in a big way.
Also in the government-backing department is defense. Cramer sees no let-up in spending here, which is great for General Dynamics, Northrop Grumman and Lockheed Martin.
Lastly there are the financials. Few markets are as strong right now as the insurance companies, Cramer said, despite the fact that they were supposed to be carrying some toxic commercial real estate. MetLife , Principal Financial, Lincoln National and Hartford Financial are all great examples. Believe it or not, the mortgage insurers are pushing higher now, too, as are the regional banks, an industry Cramer has been bullish on for some time. Even the annuity sellers are taking off, as can be seen in T. Rowe Price, Legg Mason and their peers.
Of course, not every sector’s booming right now. The oils and tech are on pause, Cramer said, “but who knows what happens when they wake from hibernation and morph into bulls.” In the meantime, investors should stay focused on these 10 raging markets, especially as we’re just about to start another earnings season.
“And I think it’s going to be a darned good one,” Cramer said.
When this post published, Cramer’s charitable trust owned Honeywell International, Johnson Controls and UPS.
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