The market's coloration has changed

Even as medical insurers react positively to news, other economically sensitive sectors are under attack.

By Jim Cramer Apr 2, 2013 8:57AM

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Insurance Money Comstock Images JupiterimagesYou could tell the moment that you saw Humana (HUM) jump $5 into the bell, and then another $5 after it, that the growth guys had found still one more recession-proof domestic security name they loved. It was just classic. We read every day that the government is trying to rein in Medicare, and we actually believe it. But then, when they have a chance to actually save some money, they give it away and allow the so-called enemy -- the health maintenance organizations (HMOs) -- a chance to recoup a huge amount of money.


At this juncture, that was very important in the market because the rest of the recession-proof domestic security names had run so much that we needed more heroes, and the government instantly provided them.


The market is at an important and difficult place. The materials, the techs and the oils all seem about to fall apart. Cisco's (CSCO) a prime example: It did the extraordinary and raised its dividend much higher than people had thought, and it went down! If Merck (MRK) were to raise its dividend that much, its shares would be through the roof.

At the same time, on Monday the sellers came for the transportation stocks. The transports are the exact other side of Aetna (AET) and Humana. They are the enemy now -- suddenly just a group of stocks that can't react positively if we even get a down day or two in traffic.


Here's how I see it. Just when everyone is thinking the Federal Reserve has to tighten, the stocks are saying -- particularly the industrials -- that the economy has taken a step down. They can't flee the industrials enough. I know this. For Action Alerts PLUS, we run a diversified portfolio of companies that includes industrials and financials and techs, even as we are underweighted in the latter. These all need a modicum of growth. The market is saying we won't get it.


It's a bad omen for now. If you own economically sensitive stocks, despite the rally in Europe today I expect you to underperform. That's how things are setting up. They aren't going to change on a dime. The coloration has changed radically.


We all feel it. Just dancing around it.

jimcramer

 

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 CSCO and MRK.   

 


 

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50Comments
Apr 2, 2013 9:48AM
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Are you suggesting this socialized, propped up, messed with, guberment supported market is difficult to connect with reality?   Yes most of us already know that.  I went to a grad business school for two years and spent I don't remember how many months learning to calculate share price.  You can throw all that reality stuff out the window now.   And now with the guberment attempting to keep the wealth folks fat and happy while they steal our freedom and our children's futures forever and give our autonomy up for the New World Order we all are scratching our heads and asking what's next.  Well I have an idea.  The market is being supported while the One World Economy becomes firmly entrenched.  This market and the folks who are controlling our futures namely the Progressive Corporatists want to hold us in line until they no longer feel it necessary.  So rock on Jim.  How naive some "experts" can be never surprises me.  When this will end is your guess and mine but eventually it will end but the result will not be anything we could imagine.  Like Obama said "America will never look the same".   To assume  this unfathomable amount of debt is a calculation that can only be supported with  the assumption a new world wide currency is a given.  To pay off this debt would require a contraction for 25 years of suffering and major social upheaval.  NO international economist is suggesting the lifestyle of the average American citizen will ever be as comfortable as the last 40 years.  Corporatism is now the rule for the world.  The busting of the present economic system is underway.  We are like cattle herded into a small pen and fed sweet corn while we await the inevitable slaughter.  We are now five years into this contraction and no where can I see the end yet.  There will be no jobs recovery as high unemployment is necessary to maintain low wage and interest rates. There will be no housing recovery as food and fuel skyrocket there will be much less disposable income for housing.  We are as the old song says, "slipping into darkness'.  JMHO

Apr 2, 2013 9:42AM
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Cramer keeps trying to inject so much drama into the markets!  This article is written like he's describing the plot line of a soap opera.  Hey Cramer, just do your job - give us your opinions and  back them up with some data.  Then we'll do our job - debating the merits of your opinions/data and making fun of you a little bit at the same time.
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So now Jim is pointing in the right direction. It's all a script. It's all strong surges, and a spiraling demise. The whole game will end when this bubble pops. And ridiculous as it seems, there will be so many people saying, "We had no idea this was going to happen!"

And the large Corps. will need to be bailed out...again.

We the people who are not in these corporations or in politics will be paying more and more.

Something needs to happen. I'd like to say vote in the right people, but I lost faith in our country's ability to do that last election.

I'm still steady stuffin' my mattress.

Apr 2, 2013 9:44AM
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i would think a set of stocks based AROUND the "non-profit" medical insurance companies would perform well.  so i'd follow blue cross-blue sheild and whoever are key to their success will be a useful investment. 

 

except i'm still in mutual funds.  yesturday i heard 2/3 of them underperformed the market last year.  that shows how well the fund managers are at their own game. 

Apr 2, 2013 11:39AM
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Steve.....I was always displeased with MFunds managers in the past, when I had 401s or participated in IRAs with them involved.....Their success was sometimes "pitiful" compared to the S&P.

 

Their Tenure and Track records are all important, when choosing a Fund..

At least 80-90% of them are not "worth their salt." in a long term investment period...

I can normally beat 90% of them and their funds every year...And the "only fee" I charge is what I put in my own pocket...Plus my trading fees,commissions and management fees are far, far lower.

I only charge Miss Lilly a few good meals and a occassional roll in the hay...

We outperformed 99.3% of them in the 2008-2009 Debacle..

And I haven't been in Mutual Fund for about 12-13 years...BUT I HAVE THAT CHOICE ALSO.

Pick a great manager, not a good one.

Apr 2, 2013 1:32PM
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Anyone that follows Cramer knows that he can at times be entertaining but rarely trusted.
Apr 2, 2013 1:15PM
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Mr Cramer .... enough with the drama!!!
Apr 2, 2013 3:09PM
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Well Boys and girls the Federal Reserve is about raise the interest rates ! Guess what that is going to do to the Stock Market and your investments ?

Apr 2, 2013 3:26PM
Apr 2, 2013 2:09PM
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Has anybody seen my 3-hole punch?  I can't find it anywhere.

 

 

Apr 2, 2013 11:56AM
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NTU....I am so glad you "spent many months"....Learning how to "calculate share price."

I can use someone like you...

I usually "just simplfy that" by division of "Market Cap" and "Shares Outstanding."

Or checking on MSN, Yahoo, Seeking Alpha, Fidelity, etc, etc.

 

But when purchasing such shares at a given price or bid...

I employ about 4-6 indicators or other values...It usually works ??

Apr 2, 2013 3:14PM
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You didn't think it was going to be that easy right? After a day spent close to triple digits and better volume than yesterday, manipulators started doing their thing at about 1415 hrs so we have given up a lot of the gains...Still almost an hour to go, hopefully we will be able to hold and crush these cheating crooks, key word being hopefully...More after the close.
Apr 2, 2013 11:26AM
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Cramer is an entertainer of sorts, what a lot of his pay is based upon.

Whether we Do or Do Not make use of his suggestions are highly suspect, with this Group..

I personally still think he should dress up as "Krusty the Clown." good for laughs..

 

Every Pundit or Analyst, finds an Acorn in the Forrest ocassionally..

I like specifics more than guesses, for the most part..

Tell me where the Acorns are.....I will find them myself.....The Lil' Red Hen always did...

Apr 2, 2013 12:31PM
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No one can predict the future...No stock market guru can admit that they can do that. It is obvious that tea leaf readers are not one of the best jobs to have. However we can look in the past and see the mistakes that have been done before. Try looking into what happened at The Fall of the Roman empire. The economy had a great deal to do with it, but you have to have the proper SOCIETY to build a proper economy. Here is a short formula  Society=citizens+emperor+senators+army.Trade+taxes=economy.  If you will excuse me....I have an appointment with the Oracle of Delphi. Sometimes referred to as "Jim Cramer." 
Apr 2, 2013 3:29PM
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Now I gotta go to town, and buy a stapler and a paint brush..
Apr 2, 2013 3:28PM
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Most Commodites and Energy are down today..dammit..

But Retail isn't doing too bad..?

Apr 2, 2013 3:21PM
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Well I take my "own" advice and buy more goldminer this morning and already $75-80 down on the purchase....I need to make better decisions....Just adding to accumulation..This trade was not cheap.

Sooner or later, it should pan out....Is that not what Gold does.??

 

They are Canadian, from Vancouver also.

Apr 2, 2013 3:16PM
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Evil....Thanks a lot on Cobie Smulders....Ahhh, Cobie...ahhhh....Robin, my dear.

Did go on line, like Steve said.

She is hot...See she's got a boyfriend and baby....Toooo baaaad..

I would probably have trouble finding a MaXim mag from 2010, she was on the cover, eh.

Read about 4-5 Articles w/pics, about her.

Interesting given name "Jacoba" and the rest sounded Catholic...??

True Canuck from Vancouver....Started out modeling.

She's Aces in my book...Miss Lilly thinks she's funny too.

Apr 2, 2013 12:44PM
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Het Re-tog

Colbie Smulders (Robin from How I Met Your Mother)

Maxim Magazine Dec 2010

Check it out.....eh!

Oh and go market go.

Apr 2, 2013 11:47AM
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The first couple times I looked at the picture accompanying the article..

 

I thought it was a Mailbox full of money....I like that.

Instead it was a First Aid Kit...But I still like it...The money that is, all we have is iodine & band-aids.

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