Is market playing a new ballgame?

What turned things around Monday? Here are 5 reasons that just might have some staying power.

By Jim Cramer Oct 16, 2012 8:51AM logoPhotodisc SuperStockThe charts were so hideous, almost every one I looked at. Yet we had a terrific rally Monday. Just shows you how deceptive everything can be.


What turned it around? I count five reasons that just might have some staying power, no matter what happens in Tuesday's presidential debate.


First, Europe's bond markets have gotten quite good of late, including the Greek market. We have been suffering from a European hangover pretty much every day for the past couple of weeks. The strength in Italian bonds versus, say, last year is remarkable. No wonder there's a bid every morning in those stock markets. 


Second, the negative Apple (AAPL) stories have dogged the market. Monday was the first day I heard people say that perhaps if Apple bounces off the low $620s it is time to buy. It did. Soon there will be people who say the downside in Apple may actually be less at this level ahead of earnings than the upside. When was the last time you heard that about this stock? (Even my hatred for tech has limits).

Third, when Citigroup (C) reports, there's usually some flaw that brings the whole deck of cards down, but not this quarter. The emerging-market surprise took everyone by storm. The net interest margins were good. The commentary was almost uniformly positive, except for the one area everyone else is raving about: housing. It was an oddly good quarter. 


Fourth, regarding Sprint (S), the idea that there's $20 billion somewhere, anywhere, that could be headed to our markets actually mattered tremendously. Just a huge, out-of-nowhere box of confidence. But I still think the tower stocks and Clearwire (CLWR) should be sold. 


Fifth, we get a lot of different macro numbers. Somehow this retail sales number Monday morning has become like a mini employment number. Things trade off of it. The apparel companies and many of the retailers all took off as soon as we saw it. I am noting once and for all that this retail sales number is regarded, in this era, as actionable.


For Tuesday, there are more new data and a big debate. Still, the takeaway is that coming into Monday's session all I saw where charts that were breaking down, except, notably, transports. Coming out of Monday's session, I saw stability where there was none.


Maybe, like the second half of the Broncos-Chargers contest, it's a new ballgame?


Jim Cramer


Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and is long AAPL.




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Oct 16, 2012 12:05PM
Oh never fear the boo birds will be out once they figure out how to scare everybody with the next great "crisis". If it ain't the EU, it's China or oil prices or the election or the fiscal clliff and they always got the future inflation from all this QE. Let's just get this damn election in the can so we can see who's going to lead us over the fiscal cliff and how far down we'll have to go before we bounce like a dead cat.
Oct 16, 2012 12:51PM
To add to Tumbleweed - the President also made a mistake in trusting in the Harvard mafia to have the country's best interests at heart.

Clearly they do not !

2012 to 2016 get rid of them President Obama and get some sound advisors who work for the US.
Oct 16, 2012 10:31AM

so you're speculating over pictures-charts-graphs without actually knowing of any of the fundementals? 


in other words, "guessing"

Oct 16, 2012 1:51PM

Sixth, Inflation or QEn.


'To infinity...and beyond ! !'


It's not that the Economy is improving, is just that people is 'Paying More for Less"  ( Hope this is not a registered quote by the Waltons) 

Oct 16, 2012 11:41AM
The American economy is built on a foundation; like any other, and this foundation is what I would call mythological.  As long as we have products allowed in our market from economies with vastly lower lifestyles then the pressure on our foundation is a reduced lifestyle.  Until wages in America become competitive with the Asian economies we will continue to live in dream land. We need Americans to accept a lower standard of living and this lower standard will result in fewer products purchased and lower profits for the American business.  The real hidden killer in this new "imported" economy is the pressure to inhibit new product introduction and inhibit innovations in production practices.  As nothing ever goes straight up or down we will continue to stumble along until Americans realize they have been sold out to a New World Order and their future will continue to show less and less.  You want to live like a peasant in Cambodia go to Cambodia. But you must understand the present business/political imperative is to bring that lifestyle here to America. Every knowledgable International Economist will tell you the future for the average American is less.  So Wall Street can BS us all it wants but the trend line is lower wages and lower lifestyle for most Americans and this will result in lower profits for American Business. JMHO
Oct 16, 2012 12:29PM
How many middle class people in the US would agree to making $1.00 an hour while CEOs continue to make millions? You are dreaming! And that would be a nightmare for America.

If anything wages in other countries like China are coming UP. The US should not lower wages for the middle class any further. If that happens, there will be a war like you've never seen.

You've given me EVERY REASON to PROMOTE the re-election of President Obama. Looks like the New World Order is a Conservative idea. No thanks.

Oct 16, 2012 12:44PM
Go to any restaurant in 95% of the country at the weekend and then tell me  people have no money.

This is just the usual trickery to convince people that they are in dire straits and should be grateful to have a job and a home and not question their lot in life and expect more.

Your mission if you choose to accept it is to produce as an employee - consume as a customer  and then die at an appropriate time so that you do not cost the 1% any of their profits.

Smash the walls Boxer !!!    : )
Oct 16, 2012 12:03PM
Social mobility is the only way your beloved capitalism will survive.
With slave wages there will never be social mobility. If you want to start a real class war, go ahead and promote the idea of slave wages for the middle class.
Oct 16, 2012 11:50AM

Next time up. Your argument is nothing but a rationalization for outsourcing. You REALLY think we should lower or standard of living to that of a $1 an hour Asian peasant to be compeitive for his labor???. I call that Globalist economic treason
Oct 16, 2012 11:43AM
 The major mistake Obama made was appointing Geithner and Immelt to be on his economic team because they continued on with the same economic philosophies as they had during the Bush collapse

 And Gentle Uncle Ben once stated that the preservation of upper class wealth is paramount in his mind, cementing his position as a trickle downer.Why keep him on while at the same time disparaging trickle down economics?
Oct 16, 2012 10:44AM
Who questions it does not have staying power?  Only misinformed, unintelligent reporters looking for sensationalism and false headlines.  It's normal growth.
Oct 16, 2012 11:37AM
I am still thinking the market hits 14,000 on the Dow maybe 14,200 by Christmas.  I am guessing a pullback in late Jan early Feb.  It all comes down to holiday numbers, do you believe the spike in retail sales is just gasoline and early deal searching for the holidays, or do you think it is just growth and the holiday sales will be strong.  If deal searching has started it could make the numbers around Christmas look worse a sort of borrowing from tomorrow's demand.  Time will tell.
Oct 16, 2012 11:29AM

"Is the Market Playing a New Ball Game"


NOPE..just a continuation of manipulation of data regarding job creation, unemployment numbers, housing info, consumer sentiment etc. all in an effort to keep the market as high as possible going into the election.  Even when bellweather companies report bad earnings or forecasts such as CAT, Alcoa etc. it has no ill effect whereas if they report even a glimmer of positive news the media jumps all over it and the market soars.  I think the whole economy is nothing more than a house of cards just waiting to topple but those in control will not let that happen but we shall see after the election.

Oct 16, 2012 12:15PM
Wow, I never realized Charles and David posted on these boards.

Take your oligarchy and shove it.

Oct 16, 2012 11:23AM

 And then Jack Welched on America had a conspiracy stroke when the unemployment rate fell to 7.6% 4 days before the election

reasons market is deflying gravity and going up


1) Bernanke and QE3 or is it QE4 now

2) Bernanke and QE3 or is it QE4 now

3) Bernanke and QE3 or is it QE4 now

4) Bernanke and QE3 or is it QE4 now

5) Bernanke and QE3 or is it QE4 now


pretty much the market is going to crash and burn all the way to the ground within 5 years tops


The Chinese now have an official policy of doing away with the US dollar as the world currency within the next 5 years.


They have used their US Treasury bonds to secure their new buildings across their country so they can quit paying on the buildings and the US investors in those buildings will not get the building but the worthless US T-bills backing the buildings when the US dollar collapses.


China has solved what will happen to their $1 trillion dollars plus in US T-bills if the US dollar collapses and so they are now free to destroy the dollar as they have no stake in the dollar anymore.


They are saying that the Chinese yuan will be the currency to replace the US dollar as world currency and as far as I can tell they are right.


The US is living on borrowed time and perhaps Obama should lose the election as the next US president will be the one the history books say lost the US economy and let the US self destruct.


The rest of the world worried about our nukes will demand the fallen US abandon it's nukes. Probably China will get them.

Oct 16, 2012 11:52AM

 The psychology has changed. I travel around the world a bit and everywhere I go I see people improving their standard of living. I've seen people living in grass huts that have cell phones. Globalization is lifting people out of poverty at an astonishing rate. Commodities and multinationals have nowhere to go but up. Western civilization may have to adjust to a lower standard of lliving because like it or not, things are evening out.  That will be unacceptable to many, but this is good for humanity as a whole. Probably not so good for the planet. There's no turning back although there are sure to be fits and starts.

Oct 16, 2012 11:42AM
Consumer confidence is in the TOILET ! Have a happy holiday season ! There is more HOPE AND CHANGE you can believe in !
Oct 16, 2012 12:09PM
 Sad. Our elections have devolved into spending billions on TV ads to convince the undecided, disinterested, uninformed wishy washy people among us who usually never bother to vote, to see it your way via spin
 Must be one hell of a payoff at stake, huh. Ya think maybe Mitt is just another one of them bought off politicians?? Nah , not a chance!
Oct 17, 2012 7:40AM
NOTE TO THE COMMENTATORS... rigging the default to return to "BEST" and BEST being a bunch of nonsense won't help your advertisers. Get a life & leave the machine on auto-pilot. Leave your own political lean out of the picture completely.
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