Take a break and wait for clarity
It's hard to pinpoint why stocks are rising, so it may be time to step back and assess the action.
By Jim Cramer, TheStreet
Monday felt like "money in," one of those days where you can't pinpoint what triggered the rally other than a surfeit of cash.
You had the oil stocks up even though the oil futures were down. You had the natural gas stocks higher even though natural gas futures were down. You had still one more day of strong health care stocks, even though Nancy Pelosi swore up and down that she would jam health care down our throats.
You had retail up again even though we had big storms that made it so February will most likely be disappointing. You had Ford (F) blitzing higher even though we know that they lost a lot of showroom time to snow days.
Most important, you had Apple (AAPL) and Amazon (AMZN) rallying more than 4 points -- on nothing. You could attribute the strength in Apple to Skyworks (SWKS) saying business was strong -- they are a supplier -- but that's pretty attenuated. Plus, rumors that the iPad could be late didn't touch the stock.
Amazon breaking out to the upside? When I posted a query in Columnist Conversation why that was, my friend and contributor Matt Horween shot back, "Because it is a retailer." I know that actually was enough to propel things higher Monday. (You should all read Sears (SHLD) Chairman Eddie Lampert's blistering letter to shareholders that talks about the unfair nature of Amazon's tax-exempt status.)
Anyway, the mystifying thing is that there really isn't any money coming in. None of the surveys show money coming in. There is money coming out, in the form of mergers, but the new issuances wildly trump that.
It is always possible that one giant mutual fund that took money out at the end of January put it back in Monday, one of those chronic decisions at the beginning of the month that we see behind the scenes. The buying extended from the Dow to the Russell 2000, so it was more of a total buy-side jailbreak than a targeted spend.
Suffice it to say that I think that kind of buying is unrealistic and is precisely the kind of thing I HATE ahead of a big employment number, because now there's plenty of reason to sell off and no good reason to buy.
It's time to walk away for a few days to make sense of "the action."
At the time of publication, Cramer was long Apple.
Copyright © 2014 Microsoft. All rights reserved.
The idea of US crude being a shelter from turmoil abroad may not be as far fetched as it seems.
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