Mad Money

Cramer's game plan: A vicious rotation is upon us

The market stories really worth watching
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The market stories really worth watching

As the retailers, oils and banks rally, giving the seemingly never-ending run in the growth stocks a rest, Jim Cramer took note of the broader shift happening in the market.

"Looks like value took it to growth today as one of the most vicious rotations I've seen in ages rocked the averages and brought some of the real rocket ships screaming back down to earth," the "Mad Money" host said.

To Cramer, it seems like the market may have gotten too negative on certain sectors, especially with a Federal Reserve meeting on the horizon in which the central bank is expected to raise interest rates, which would be a boon to the banks.

"What surprised me the most today, though, was that the rally also included health care stocks that had been stalled, chiefly pharma and biotech, as well as industrials that are involved in the extraction of oil — think Caterpillar and Helmerich and Payne — which, until today, candidly, had been 'the house of pain,'" Cramer said.

So with the rotation expected to continue in the near term, providing a buying opportunity for some of the top growth names, here's what Cramer is keeping an eye on next week:

Monday: Monthly Treasury Statement

While he normally does not care about it, Cramer is watching the release of this federal budget statement closely, because if the government reveals it did not collect enough tax money, it will result in more fuel to the fire burning in Congress' debt ceiling debate.

"The Treasury can't afford to run out of money and this could further delay the Trump agenda for tax reform and repatriation," Cramer said. "I smell trouble here."

Tuesday: H&R Block

The tax preparation company reports earnings on Tuesday, and while concerns about the Trump administration simplifying the tax code — which would hurt the tax prep business — have been drowned out by political turmoil, Cramer still favors a different name.

"H&R Block has run, so I prefer Intuit on any continual pullback in growth stocks like we had today," the "Mad Money" host said.

Wednesday: Fed meeting

To Cramer, this is the most important day of the week, as the eagerly awaited central bank meeting may result in a boost to interest rates.

"It's vital, after day two of this bank stock rally that we had [Friday], that the Fed not only raise rates, but say it will continue to raise rates and leave the door open firmly for another rate hike this year," Cramer said. "If the Fed waffles, then the rotation to the banks ends immediately and the money could veer back to the techs."

Thursday: Kroger

The supermarket chain reports earnings on Thursday, and with a stock down 10 percent for the year, Cramer is watching to see if the consumer goods name has gotten too cheap to ignore.

Friday: Corning

An analyst meeting at the glass and ceramics manufacturer could give investors a clue about how the technology sector is doing after rotational swings in the market, especially since Apple announced a $200 million investment in Corning as part of an advanced U.S. industrial fund.

While the larger rotation is not unusual in bull markets, it just proves Cramer's point that investors should always aim to be diversified in case certain sectors get too hot.

"The bottom line? The rotation can't be over. It just began. But you have my game plan for how to handle the trading and investing," the "Mad Money" host said. "If you own no tech, you're going to get your chance, perhaps as early as Monday with some beaten-up FANGs [Cramer's acronym for the stocks of Facebook, Apple, Netflix, and Google, now Alphabet]. But remember: there is no gain without pain."

Watch the full segment here:

Cramer's game plan: A vicious rotation is upon us
VIDEO10:5010:50
Cramer's game plan: A vicious rotation is upon us

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