Markets need to cool off a bit
Congrats, market, on 8 straight up days. But 9? The last time we had a winning streak like that was last century.
Streaks are made to be broken eventually. Nevertheless, I feel we are on borrowed time now that we have had eight straight up days for the Dow Jones Industrial Average ($INDU). We haven't had nine up days this century, and you have to wonder why this time we'd break that streak.
Tuesday night I was struggling right until the close to figure whether it was worth it to bother mentioning the streak. But it is pretty instructive to go back to when we last were able to go up for nine consecutive days, and that was in November 1996, truly the halcyon days of the bull market, when we had a combination of tech, pharmaceutical and bank stocks rallying.
It was the beginning of the Internet and the ascendance of the personal computer and a bizarrely positive period in the evolution of the drug industry when a ton of what turned out to be blockbusters were approved. We had gridlock and we also had a budget deficit that was being pared radically and we had the peace dividend. We were between international crises. The Mexican bond market had collapsed two years before. The Asian contagion, the Russian Ruble Wreck and Long Term Capital hadn't happened yet.
In short, it was a wonderful time to own stocks.
We do not have those circumstances now. Instead we have a flood of liquidity and some excellent earnings.
Just how we hit the eighth straight day Tuesday was instructive for how this Dow got to be up double digits already. We got great news from Merck (MRK) about a possible breakout anti-cholesterol drug and we got rumors of a gigantic order for Boeing (BA). Plus, Wal-Mart (WMT), which had freaked us out about February earlier and also had dealt with some leaked e-mails that were extremely negative about the beginning of that month, told us that things were back to normal once again.
We just keep getting good component news. Now, as my friend and colleague Matt Horween informs me, we could be ready for a breakout for another Dow component, Verizon (VZ), and when Verizon goes up it doesn't take long for AT&T (T) to follow.
Each day something percolates.
Now, we all know that without more news we are just playing the multiple expansion story, meaning that we are bidding stocks up on the same information over and over again, stretching the valuations as we do it.
But unlike other periods where I have seen this kind of multiple expansion, we certainly weren't stretched at the start of it.
That's why, although it's terrific to have had the longest streak of the millennium, I do believe we need to cool off a bit. The only reason we haven't, of course, is that everyone wants it to cool, which is precisely why it hasn't happened yet.
So congrats, market, on eight straight days up. But nine? Unless we have the same set of delicious circumstances developing -- and I just don't see it -- the breather may, at last, be here.
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 stocks mentioned.
More from TheStreet.com
QUIET HERE anymore, well at least we don't have all (or as much bs) about Politics or hate talk about Presidents and other name calling...
Somedays it's a refreshing change, to read at least about some Market events or discuss a Stock that might be interesting...
And then we always have to have a few jabs at Kramer...It's not our faults.
Jim puts himself out there and becomes a target..
It's ironic. A few short months ago there was a lot of static about the predictability of the swings - how it acted like a yo-yo and was fully manipulated by the day traders. Now, that there has been some steady trend pattern the consensus is that the inevitable correction is on its way so let's hold back and buy on the dip. Apparently. confidence in establishing a new plateau is not in vogue yet despite the fact that the funds for the upswing did not emanate from transition from bonds to stock but from cash holdings. Sometimes, investors don't realize that they are ther own worst enemy, except for the wackos who blame the market for all their failures with endlessly unfounded ,baseless allegations.disguised as reasons.without having a clue about the operation of the market.
I wonder if the market "correction " is based on the fact that the up tick is based on nothing but QE 4 --QE 4 ever ?
I think it's all intertwined.
Most people go by their own life's experience's in terms of investing . For example, if you are unemployed, you are not buying stocks , or underemployed.
or on food stamps I don't think you are in the market.
If you back out the Feds endless QE4 ever, the public and the instituions could not drive the market this way.
THAT's why I say it is artificial.
"The only reason we haven't, of course, is that everyone wants it to cool, which is precisely why it hasn't happened yet."
Sounds like you're a little superstitious Bobo.......... I thought it was all earnings, great economy and strategy with you?
"the FED may be inflating the Markets a little" ??? If you spend a dollar per second it takes 11.5 days to spend $1 million. If you spend a dollar a second it takes 37.5 YEARS to spend a TRILLION.
the fed has ratcheted up its balance sheet by over trillion SO FAR and has committed to adding another trillion per year to infinity and beyond. this will all end badly as we either tip over to another credit downgrade for the US with a spike in interest rates OR there is a strong whiff of the fed coming to its senses and taking the punch-bowl away OR inflation begins to hike. and where will the market go if several or all three of these things happen at once?
the definition of insanity is repeating the same actions and expecting different results. low interest rates and an unregulated banking/derivatives environment killed us once and it will kill us again. its not a matter of if, only a matter of when.
Spooker35....The point I'm trying to make...
Is the Elite, Rich and Powerful.....Have gained so much after the downturn in '08-'09...It boggles the mind...
And on the other hand the Middle Class and the "classified" Poor in this Nation....Have lost half or more of what they had...
This Disparity amongst Classes of People in this Country are the, or a Major problem..
Worst yet, is many of the Rich, including Corporations are Hoarding, because of Fear and self preservation...They need to help more and they could...But instead are moving money and other assets off shore...OR leaving them there...Overall re-investing in America will eventually be more profitable for them in growing their Wealth...IMO
Our Government can not do it alone...It takes forever and extends debt for Decades..
The Rich/Elite got spooked from fear of repeating a Depression in this Country, and from that idealology, is why we are where we are at today...A long pitiful Recession..
The FED can not, pull their foot off the gas and slam on the Brakes...
That would be somewhat disastrous...
But easing off the throttle, and slowing to a stop has to happen sooner or later; Maybe sooner the better.??
We got ourselves into a pickle..but didn't go into a Depression...NOT REALLY.
It's time that we build this ladder and climb out of the BRINE..
The Alternatives would have been far worst..
I know the FED may be inflating the Markets a little...
But they seem to be keeping other inflation under control..In the REAL world.
It's part of their Jobs....We don't have Greenspan type catastrophes yet...?
If you feel that is the case, maybe you should be investing in some type of PGMs or other stores of value, that act inversely to their Actions or lack of, and Currency valuations..
To sit around and only Carp and Bitch about it, accomplishes little if nothing..?
If you can or are able, maybe you can change some of your problems to the better.?
"This to us is something that we're not going to give up on, because we're not going to give up on destroying the health care system for the American people".
Yes ABS....I live West of Somewhere...
Somewhere is everywhere...
And I feel where we live, is the Center of the Universe...Everyone should live that way.
Sure the FED is kicking and no doubt some Corporations are benefitting, more then they should...
Other Companies are making Revenues and Decent earnings and are Hoarding cash..
They are paying and increasing dividends, along with stock buybacks..
Their are or has been a little Merger Mania going on, in worthwhile acquisitions.
Other business' are hiring back or expanding their workforces, albeit slowly...
Not all of this is about FED QE only...IMO
Try to remember ABS....The Markets/Indices, Stocks/Equities are not the Economy..At least not in direct entanglements...
The Markets represent, doings on Wall Street..
The Economy represents, doings on Main Street.
Barry:I`m never drove, I own a limo service.
and not NY.I like the warm climate.You can have the cold weather where the temps
equals your IQ.
i've been in the markets longer than cramer for what it's worth
"everyone wants it to cool that's why it hasn't happened yet"
1.you, stefanie link, and the ceo's you lick aren't everyone(although you think you are)
2.you blow about yield protection,fundamentals ,and homework but that's not what prices stocks
3.when everyone thinks it's going down, they sell and it goes down
4.when everyone thinks it's going up they buy and it goes up
5.this is precisely why some good companies have poor performing stocks and vice versa
6. you and stefanie should quit killing your followers with your hack advice
Sorry ABS...Not really all that Secretive, just cautious...We are not Facebook,MySpace type people.
Our kids and G-kids are...
I grew up in a different type of World....Military and Corporate training, made it that way.
Glad no one takes any advice from me...A Bio-Tech that I have been speculating a little with....
Blew up last night and this morning..Down about 25-35%...
I pulled a Buffet, and went where "Angels Fear to Tread", bought more on the bottom.
Stupid little reports and a off-hand remark about guidance, can change your life in a few hours.
Even if a Company has decent other Fundamentals..
Also other opportunities around today..
And Walgreens(WAG) just keeps getting better..
Many of our Elected Officials, have a big mouth; For both feet !!!
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.
Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
VIDEO ON MSN MONEY
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.