Cramer's 'Mad Money' Recap: Go for Growth (Final)
NEW YORK ( TheStreet) -- Nobody likes a losing streak, Jim Cramer told his "Mad Money" TV show viewers Tuesday, but even after a fifth day of declines, Cramer said it's still not time to throw in the towel.
Cramer said he's not ignoring the many negatives in the markets. Unemployment is still weak, business confidence is low, Chinese imports are on the decline and the Italian bond market is a mess. All good points, noted Cramer, but also ones that are already factored into the markets. It's also true, he acknowledged, that the markets have had an incredible run since September and are due for a pullback.
But what's not factored into the markets, said Cramer, are earnings and earnings surprises like those delivered by Alcoa (AA) . Plus there are also a number of contradictions in the market that are creating opportunities, if investors know where to look.
Cramer said that the bears are big on rising fuel costs, but the oil stocks are signaling oil in decline. That creates opportunity, he said. The markets are also sending all stocks lower, he noted, which creates opportunities for the sectors that don't deserve that punishment. Cramer said he simply cannot be bearish on restaurants or retail when oil prices are likely to retreat, nor can he be bearish on high-growth stocks or on companies that prosper when their fuel costs are falling.
Cramer concluded by saying that five losing games does not make a season, nor does five losing days make the market.
Off the ChartsIn the "Off the Charts" segment, Cramer went head to head with colleague Tim Collins over the health of the overall market as seen through a technician's eyes.
Collins used a recent chart of the S&P 500 to note that the index took a turn for the worse today after it fell below a key level of 1370. He said after that point, sector after sector began to get crushed as the selling intensified.
But what of the market leaders, like tech, retail and the home builders? Collins noted that the S&P Homebuilder ETF (XHB) looked as if it was going to test its 50-day moving average once again and bounce higher, but after today's action, the chart has now turned ugly. Collins noted similar patterns with the S&P Retail ETF (XRT) , SPDR Financial ETF (XLF) and the SPDR Technology ETF (XLK) , all of which showed a shimmer of hope until today's selling gained steam.
Cramer said that in volatile markets, technical analysis is only for the nimble, as these metrics can turn of a dime as they did today. He instead recommends that investors stick with the fundamentals of individual high-growth stocks and use a longer time horizon.