Mad Money

Cramer Remix: It's time to investigate risky VIX-related trading products

Key Points
  • "Mad Money" host Jim Cramer's got a message for Congress and the SEC.
  • Cramer also sits down with the CEO of Novocure to get the latest on its cancer therapies.
  • In the lightning round, Cramer shies away from a group within the red-hot technology space.
Cramer Remix: It's time to investigate risky VIX-related trading products

The stock market's multi-day sell-off two weeks ago reignited Jim Cramer's battle against the risky, volatility-related exchange-traded products that were responsible for the brutal decline.

"I'm calling on Congress to investigate these instruments," the host of CNBC's "Mad Money" said on Monday. "I'm calling for the SEC's enforcement arm to look into whether there's culpability and manipulation, while the corporate finance department of the SEC should re-examine the reasoning behind allowing exactly these kinds of products ... to be in the first place."

These products allow investors to effectively bet on the CBOE Volatility Index, often referred to as the VIX or the market's "fear gauge," which measures expectations of near-term volatility as conveyed by the S&P 500's option prices.

When volatility is low, the returns on these products — often exchange-traded funds (ETFs) or exchange-traded notes (ETNs) — are bountiful. But when the VIX spikes, owners of these products become forced to shed other positions to compensate, sending stocks reeling.

Cramer has railed against these products for years. On Monday, he weighed the consequences of getting rid of them for good.

"What would really be lost? OK, some fees. Maybe a few strategies that failed," he said. "What will be gained? How about this. How about a restoration of the integrity of the system, a system that's been challenged, yet again, by instruments that should never have been created."

Cramer's game plan: A retail earnings bonanza

A customer looks at boots at a Macy's store in New York.
Peter Foley | Bloomberg | Getty Images

We can't keep it from you any longer, Cramerica. After two weeks of Olympic festivities, Cramer is back and ready to help you navigate the surging stock market.

"Things have gotten a little crazy around here," the "Mad Money" host said. "That's why I think what we need, more than anything else at the moment, is to get right back in sync immediately."

Without further ado, Cramer presented his game plan for a busy week of earnings, including reports from Macy's, Lowe's, Foot Locker and a special hearing with the new head of the Federal Reserve.

One indicator to rule them all

A van is seen in a sinkhole from Hurricane Irma on Monday, Sept. 11, 2017 in Winter Springs, Fla.
Joe Burbank | Orlando Sentinel | TNS | Getty Images

After an extended Olympics-induced break, Cramer wanted to get back to the market basics he has put forth for investors over the years.

"We know that earnings can be ephemeral, bonds can be fickle and the Fed can be downright enigmatic, while currencies and commodities spook easily," the "Mad Money" host said.

"We need something that's solid as bedrock, which is why I subscribe to a product called the S&P Short Range Oscillator — I've been following it closely every single day of my life since back in 1987. It's the single best indicator of whether the market's overbought or oversold, meaning it tells you when we've gone too far too fast in one direction."

Right now, the oscillator is signaling a potential buying opportunity, so Cramer advised investors on how to play any potential weakness.

To pounce or not to pounce: General Mills and Blue Buffalo

A woman shops for Cheerios cereal at a Price Chopper supermarket in South Burlington, Vermont.
Robert Nickelsberg | Getty Images

Every now and then, Cramer spots a stock market story that's being held back from glory for all the wrong reasons.

One such story Cramer noticed on Monday was General Mills' $8 billion acquisition of Blue Buffalo Pet Products, a high-end pet food brand.

Shares of General Mills, the consumer packaged goods giant behind such storied brands as Cheerios and Betty Crocker, fell on news of the deal, sliding down to $51 and change from $55 on Thursday.

The move itself didn't surprise Cramer. It's not uncommon for an acquirer's stock to decline on news of an acquisition, especially in the troubled food space.

"But, and this is the mother of all buts, I think the Blue Buffalo deal is a brilliant move," Cramer argued. "This makes this pullback in General Mills a genuine buying opportunity. GIS already tumbled from $60 down to $55 during the big vortex of selling of these kinds of names. Now it's come down to $51 because of what I consider something that's smart. Call me a buyer at these levels."

Novocure executive discusses two-pronged strategy

William Doyle, Executive Chairman, Novocure
Scott Mlyn | CNBC

If you ask Bill Doyle, the executive chairman of the board of Novocure, the two-pronged strategy for expanding his tumor-tackling biotechnology company is "relatively simple."

In an interview with Cramer, Doyle told CNBC that the first part of the company's growth plan will stem from three sources: international expansion, domestic expansion and its patients, as more and more shift to using Novocure's therapy as their primary treatment.

"The second part of the strategy, of course, is to use it in other tumors," Doyle told Cramer on Monday.

Novocure's main focus to date has been treating glioblastoma, or GBM, a type of tumor that affects the brain.

"The next one in the pipeline is mesothelioma," Doyle said. "This is the lung cancer associated with asbestos exposure, another terrible prognosis."

And with three additional Phase 3 trials underway in Novocure's pipeline, including for pancreatic and ovarian cancers, one thing was clear to Doyle:

"With the existing business, there's multiple avenues for continued growth," the executive said.

Lightning round: Toying with the optics

In Cramer's lightning round, he flew through his take on some callers' favorite stocks:

Lumentum Holdings Inc: "Optics are too hard for me. I'm going to have to say take a pass. We've got a lot of other good semis going, lot of other good tech. Let's just say do Cisco."

Petmed Express Inc: "Not bad. I do prefer Idexx Labs. It's got much more consistency."

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