Time to sell? Not yet, but watch these patterns

They may explain why this market may stall out after its remarkable advance.

By Jim Cramer Sep 17, 2012 9:58AM

TheStreet.com logoI cannot for the life of me figure out how much of this rally is short covering. On Friday I was watching the apparel companies and thinking it's short covering aplenty.


Deckers (DECK), which has been languishing seemingly forever after a bunch of misses, has now stabilized and is gapping up nothing, a sign that the perennial short may be worrying the bears.


PVH (PVH), Ralph Lauren (RL) and V.F. Corp. (VFC), three names that have been in the cross hairs of shorts because of their European exposure, seem to be in orbit now. That feels like beleaguered shorts who have just thrown in the towel. The same goes for Fossil (FOSL), which is going crazy to the upside.


Even Coach, which "blew" it, has a feel of "time to cover." Only Nike, which has everybody freaked out, has been able to buck the bullish trend.


Or how about the Zynga (ZNGA)-Groupon (GRPN) world? The law of small numbers precludes Zynga and Groupon from being home runs. It is time to cover. Plus, the whole group is getting a boost from Facebook's (FB) bounce, which now comes under the category of something real and something animal-spirited.


There had been a sense that the high-growth restaurant names peaked post-Chipotle (CMG), but the other day a boutique research firm said Panera's (PNRA) numbers could be stronger than expected. The group sustained a jarring upward move, although Chipotle gave up some of the Panera-inspired gain on Friday.


Watch these patterns. They are often gains made at the later end of an advance. The powerful rally last week on top of day after day of increases means it's time to cool off, because now these gains are the froth that comes from the Johnny-come-latelies and the hedge fund coverers.


This is not a reason to sell, but it can help us understand why the market may stall out now after its remarkable advance. You can be led by these stocks for only so long before the rally becomes very long in the tooth. 


Jim Cramer, TheStreet.com 

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 has no positions in the stocks mentioned.



More from TheStreet.com


Sep 17, 2012 1:19PM
Did anyone really expect Bernanke's "brilliant plan" to actually work?  Psssst...obama..your policies...they aren't working buddy.  QUIT trying them.  
Sep 17, 2012 1:33PM
Considering the state of the global economy, there is NO way I would buy into this market with the DOW at 13,500 and the S & P 500 at 1460!
Sep 17, 2012 11:01AM
Forget a return to growth. Will not happen. Compressive deflationary contraction rules the day. Even Benny Bucks from the Fed cannot stop it. If we do not manage contraction, contraction will manage us.
Sep 17, 2012 2:24PM
Why should America listen to your corrupt comments, Cramer. The real reason for the market to sell off is because of the September contract expiring this week, why won't you tell the folks that? The market is controlled by the same corrupt group that you have been associated with for decades.  I do not know how you and they can sleep at night. One day the cleansing will come and you and the rest will all be jailed just like the conspirators in Iceland, then the American economy will produce jobs and wealth once again.
Sep 17, 2012 2:46PM
Bennie and the boys buying 40 Biillion per month of MBS will actually hurt the lower and middle class. It will momentarilly sugar high the market. All these central banks making money out of thin air will come home to roost, maybe next year. Never ending monitizing of debt just isn't good policy.
Sep 17, 2012 1:02PM
Sep 17, 2012 2:10PM
I did not need to read his article to make my decision on what to do with my money.  Neither should anyone else.
Sep 17, 2012 12:49PM
Last week,this was the start of something BIG!    Don't miss out!!!

This week..not so much....  Gotta love the "experts".....

  I prefer Joshuas philosophy: "The only winning move is not to play."
Sep 17, 2012 11:51AM
LMAO, hearing worries about inflation. For inflation to actually occur money must make it to the 99%ers...ain't happening. The only thing inflating is the ponzi scheme stock market. Just think when the money the fed doesn't have is pulled back from the market the mother of all bubbles is going the explode!!!! My prediction 50% drop in dow over 90 days soon as Israel attacks Iran. Israel must attack before the election to make Obama show his hand. One answer... trailing stops baby!!
Sep 17, 2012 12:40PM
this guy's opinions fit nicely in the compost pile...........what a hack, shyster, salesman,grifter  
Sep 17, 2012 10:54AM
Every stock in this article except food is down by as much as 3%.  Do I misunderstand what "in orbit" means?
Sep 17, 2012 11:26AM
"animal-spirited"?  Is this an investment column or a shamanist blog?
Sep 17, 2012 11:34AM
Sep 17, 2012 5:29PM

What does this mean? Should I sell because the "shorts" at MSN MONEY are losing money on apparel stocks? With kids wearing pants sagging to their knees and girls looking like hookers, what made you think there would be a huge rush on school clothes this year, Cramer? The kids outside the walled subdivision where you live are future homeless. Bad play. Why is it every single time this market is on the cusp of a breakout to the upside the damned middle easterners ruin it for us? And why are their shenanigans always carried by our news services? If the cameras were turned off would they go home? Would the market go up? I thought it would be an easy ride to the top before December then a huge sell-off because the religious fanatics in our do-nothing Congress will recess in mid-December and leave us holding the bag. But maybe the smart money is getting out now. Who knows, as usual Cramer only predicts yesterday or earlier today, not the future.

Sep 17, 2012 5:20PM
Patterns tell us that your analyzes of stocks don't make money for us.
Sep 17, 2012 11:31PM
The middle east is erupting, maybe oil would be a good investment.  Our dollar is falling fast, maybe gold would be a good investment.  MLPs have good dividends and move oil around.  I can't come up with a good reason to buy gold except that paper money is going DOWN. I read an article that said that Merkle and Obama are finding ways to make the citizens of the world trust the markets until they get re-elected.  I read an article by a billionaire that said no matter who gets elected, we are in for real trouble financially.  I feel sorry for people who try to take care of themselves by thinking and planning and working at making money.  We work hard for it and then Bernanke makes it worth less in one day.
Sep 17, 2012 6:54PM



i would be better to toss a leaf in the wind and see where it lands then listen to you windbag

Sep 17, 2012 6:07PM
For me, I'm in a blind trust.  I've jumped out and back in to the high risk funds several times this year.  My co-worker and I both started out the year with nearly the same amount in our plans.  He stayed safe and never moved his money around.  I played the risks and moved in and out.  The timing was good at times and not so good other times.  Bottom line is; my funds have doubled, his funds remain on the low, very low side.  I think the bubble is going to burst very soon so I think I'll get out why the getting is good before it goes away.  Hide in the safe funds until the dust clears next year, if it will be next year...
Sep 17, 2012 4:58PM

ACTIVE....You're not calling me "a last in sucker" are you...?


Gotta take profits sometime and double down on better,safer Companies with bigger dividends.

Otherwise I would be on the sidelines with all these other pissers and moaners..

Just saying Wall St. is a scam...That's not me..


Been picking up Statoil (STO) lately, remember that one?

A little more Walgreens (WAG), those boomers are taking more meds; And CVS doesn't pay as good a div. dumped it.

And of course Goldminers, thanks to old Bernanke, just gotta dump at the right time...Waiting for Cramer to give me the word.

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