Sell-off seems more like the real deal

This bump might indicate that things are worse than business as usual after all.

By Jim Cramer Oct 23, 2012 9:11AM

thestreet logoDatacraft Co Ltd, imagenavi, Getty ImagesSo the futures run-up into the close was phony and not the sell-off beforehand?


Aided by Dupont (DD) and Texas Instruments (TXN), are we just going to go right back to where we were before the programs kicked in? Was this some errant bet by some market player who believed Romney would score a KO Monday night and Romney is better for stocks than Obama?


Seriously, that whole move is a total head scratcher. When I was trying to write my open for last night's show, I was acutely conscious that by the time I finished having my makeup applied, which actually takes about seven minutes, the market's coloration had changed and changed for the positive -- for no reason whatsoever.


Of course, when it's happening, you think the decline was for no reason whatsoever, given that the last word is so final in this game.


Now we look at the landscape and we think perhaps Friday's sell-off was the beginning of something bigger?

How about this way to look at it: We are seeing some weakness in the industrials but pretty good performance in other sectors, including domestic housing and banks. We are seeing pronounced weakness in tech as that sector shrinks. We are seeing that oil and gas can't rally when Iran is making nice, something I didn't think would matter much but is clearly a cause and effect the day after a debate, when nobody seems to want to upset Iran.


And we have the higher-yielders hanging in as slowdown talk intensifies.


To me, that feels like slightly worse than business as usual, so the run-up was a joke.


This feels more like the real deal, and I am beginning to believe it will remain that way until tech plays a smaller role in the S&P, because it is tech and even the tech divisions -- think Dupont -- are hurting this market.


Jim Cramer's face


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 DD.




More from

Oct 24, 2012 3:24AM
Just wait till after the election if you want to see a real downdraft. With no more reason for every liberal journalist to pretend "happy days are here again", they'll focus on the so-called "fiscal cliff" (really a fiscal speed-bump, but that won't matter) and drive the market sentiment into the ditch. The global slowdown won't be spun into good news after 11/7 either.
Oct 23, 2012 9:54PM
I think the sun will arrive tomorrow morning - might be clouded over. I think happy hour will occur at several thousand bars tomorrow afternoon. When the mother-in-law retreats to the guest room, it is time to pounce....DuPont!!
Oct 23, 2012 7:25PM

Do you realize that Ben Bernanke lent more billions to banks today? Narrow-minded Republicans are always ranting about cutting spending but our expenses are already to the bone. What isn't is the cost of the Bush Wars at $1 BILLION a day and the interest on borrowed money. Most are aware of Ben's Quantitative Easing and that idiot Hank Paulsen's T.A.R.P. but few realize the principle of Fiat Printed Money. Every new printed (or electronically designated) dollar does two things: it reduces the value of all other dollars' spending power AND it creates an obligation. Banks aren't making money. They are losing LOTS of money and don't keep proper books. Once, regular Americans could go to the FDIC website and review the Universal Bank Profitability Report. It told us where banks were making money and losing it. It isn't available to us now. Major banks borrow continuously. We are likely in debt some ridiculous number like $100 TRILLION. Not the National Debt, but all debt, which includes the Debt Notes from the Fed and Derivatives Contracts. It's way past time to:


Close the banks, end the Federal Reserve and get rid of Wall Street. Within these three pariah are 100% of our woes and suppression.   

Oct 23, 2012 7:13PM

"VL, you seem to know alot. Maybe you could explain for me how obama is going to grow this economy from the middle class out, like he said in the second debate?? Not sure how the middle is going to create jobs?? Please inform me with your high IQ."


Commonsense. If Obama continues the job desert for middle aged former middle class, they become a guaranteed liability in less than 10 years. Add the SSI deficit and the huge gap in competence created by corrupt hired-in executives and filthy scum Board directors. As a bonus, throw in the terrorist level politics of Republicans. These make one huge mountain of problems. BUT, if he has a cooperative and intelligent Congress, it will abolish The Tax Reform Act, The Gramm Leach Bliley Act and the Federal Reserve Act. This creates a void because hired-in management can't perform without collusion in the financial sector, but the mass-terminated former career people can. Hire them back by eliminating the hired-in executives and using those ridiculous compensation packages to fund the recovery. Once in place, begin placing the younger generation workforce as team players. Spike gas to $100/gallon but roll out mass transit and begin shifting to a self-reliant infrastructure and society. Simply... frown on exploitation, support intelligent design shift and alternative growth. Segregate money touchers. If multiple entities handle your money, they're more likely to expose corruption. Tax the HELL out of investments and gains that don't recover and sustain America.

Oct 23, 2012 6:37PM
The give away to the banks by the Fed is why the market is up and will end soon. Thanks to Ben and the tax payers!!!
Oct 23, 2012 5:29PM
Where's your head at.  Sell when it's up and buy when it's down!!!  You have chances to make $$$ and you worry about what you can't change.  Use it, your head.  Luv this market!!!
Oct 23, 2012 5:15PM
If you place any bets on the U.S. Stock Market then you truly get what you deserve.  Why do you think it is referred to as the 'Wall Street Casino'?  Invest yes, but invest wisely.  Since 1929 our market has risen and fallen so many times most people don't even try to track it anymore.  When it gets high like it's been lately, you might start asking yourself if this is a dangerous scenero?  I am not saying liquidate and sit on the sidelines, but use Systematic Investing not emotional investing based on CNBC and the like.  With Systematic Investing you NEVER have to worry about what Wall Street is doing like the media wants you to believe.  What is Systematic Investing?  You invest your money based on a daily, weekly, or monthly principal that nothing ever changes as far as YOUR investing is concerned.  You can invest the same amount no matter what is happening that day in the market.  You can invest more money or less money depending on what you have to invest, but you NEVER concern yourself with the daily ups, downs, or sideways movement on Wall Street.  Simple huh?  I have been doing it since 1991 and now as a result I work when I want to not when a boss tells me to work.  Reduce your stress and start using my principals today.  Over time, you will be real glad you did.  I sure am.
Oct 23, 2012 5:05PM
The 80's called. They want Cramer back.
Oct 23, 2012 5:03PM
Much like the fat ugly kids who tried to hang with the cool kids in HS ---the fat losers who watch Fox TV and imagine themselves rich one day - flock to people like romney as they believe that "liking" him will make them seem more successful .......

When you have 2 opinions for virtually every question you are lying AT LEAST 50% of the time.

To romney 90% of American's are just producers/consumers and nothing more ....He would rather take care of his horses than a "poor person"....
Oct 23, 2012 4:52PM
Bobo's headline tomorrow: Rally seems like the real deal.
Oct 23, 2012 4:47PM
I'd take advice from Cosmo Kramer from Sienfeld before I'd take any from Jim Cramer....he is the real AZZMAN!
Oct 23, 2012 4:17PM

What we need is a limit on the terms of every nationally elected office position. Change the House term from 2 years to 6 years. Limit the Supreme Court Justices to a 10 or 12 year appointment. Limit the President to a single 6 year term in office. Senators remain at 6 years. Then allow for the ability to throw the bums out if they are caught with their hands in our pockets. No exceptional retirement  or health benefits... just like the rest of us.

In addition, change the tax code to a VAT system where anyone that buys anything pays a tax to support he needs of the country with no exceptions. Do away with the IRS completely other than just a handful of independent accountants to collect the VAT taxes due.

Otherwise, no matter who is elected, they just get rich and forget about those of us that put them in office. Corruption takes over due to the senior members (some, not all) of Congress guiding the newly elected on how things are done behind closed doors.

The corruption has to STOP!

Oct 23, 2012 3:51PM
Obama does pretty well in the debate, and the market crashes!

No worries! Two weeks until Reboot and Rebound!!!
Oct 23, 2012 3:50PM

Today was an opportunity for me to buy back the SPY Nov Calls I sold a few weeks ago. 3.56% gain in less than a month vs a 3% drop in SPY… I’ll take that every time.


That said, I’m not all doom and gloom like a lot of people seem to be. I also took the opportunity yesterday and today to add a few more put spreads and deep in the money calls into my portfolio. I know news has been bad and there is a lot of uncertainty but seriously INTC, CAT, MMM, DD all with P/E below 15x, some below 10x. That is nuts. Their yields alone almost justify the prices they are at now. Meanwhile you have companies like FB (P/E ~50x) and LNKD (P/E ~250x). It is like the market has gone dot com stupid again. There is no logic in the pricing in this market. As bad as things are, fundamentals still matter. There are lots of good deals out there.

Oct 23, 2012 3:40PM
When the market dropped to 6600 we made money. All the way through to yesterday we have made money from 6600 up to over 13,000. It does not matter what business pundits tell you, they make money. Does any person really believe that we the people who have to buy services and products in a good economy or bad economy are not going to spend money. Economy good, business hires. Economy bad, business lays off. Home sales and auto sales on the rise. How is that possible in a bad economy? Are things getting better? Heck, I don't know I am not a pundit, broker, analyst or anything remotely connected with finance. I am just a country boy that has made good investments for over forty years makes a little and lives damn well.
Oct 23, 2012 3:31PM
The numbers do not justify this drastic drop. Too many positive indicators should balance the negative. It is a shame when stocks can be so obviously manipulated after the President wiped the floor with Mitt Romney on foreign affairs!! You can bet that companies like Bain are making a fortune on the losses today. Any of you who don't believe that this drop is bull, are delusional!! If you know anything about numbers, and it's clear from many of your posts that you do not, you know this is bull! All of the positive indicators that were there when the market went up are still there!! They did not just disappear!! Some of you are so gullible it's scary!!
Oct 23, 2012 3:28PM
It's pretty obvious what is going on.  We have been under this false high for the past few months, that has been generated by those with the most to gain.  Now that the election is getting close, they are going to dive off the ship and ride out the storm that follows with their inflated profits intact while the rest of us who thought there might be a silver lining and got back into the markets are getting ready to lose our shirts again.  Time to buy up those worthless 1 percent CDs again because they are going to be the big gainers for the next few months until the money guys figure our whether their gamble on the election has paid off.
Oct 23, 2012 3:23PM
Now that Romney"s "dead cat bounce" from the first debate is over, his friends are desperate to do whatever they can to help him out. I can't wait for Trimp's "bombshell" tomorrow either. And Lord knows what we may see in the next couple of weeks in an attempt to try and save him. 
Oct 23, 2012 2:58PM
New way of politicans/lawyers saying trust me is phuck you. Got the picture yet or do I need to use smaller words with more pictures?
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

123 rated 1
262 rated 2
480 rated 3
651 rated 4
649 rated 5
629 rated 6
616 rated 7
496 rated 8
346 rated 9
111 rated 10

Top Picks

TAT&T Inc9



Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.