Jim Cramer Blog

Here are 7 trading ideas for today. This list comes directly from the TradingMarkets Stock Indicators page and is based upon our latest quantitative research.
Bullish
5+ Consecutive Down Days: These are stocks that have closed down for five or more consecutive days and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that close down for five or more days have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Seabridge Gold (NYSE:SA - News) & Sunpower Corporation (NasdaqGS:SPWR - News). SA's PowerRating (for Traders) is 8, and SPWR's PowerRating (for Traders) is 8.
5+ Consecutive Lower Lows: These are stocks that have made a lower low for five or more consecutive days and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that make lower lows for five or more days have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Noble Corporation (NYSE:NE - News) & SPDRS Select Energy ETF (NYSE:XLE - News). NE's PowerRating (for Traders) is 6, and XLEs PowerRating (for Traders) is 6.
2-Period RSI Below 2: These are stocks that have a 2-period RSI reading below 2 and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving with a 2-period RSI reading below 2 have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
GFI Group (NasdaqGS:GFIG - News). GFIG's PowerRating (for Traders) is 8.
Stocks Down 10% or More: These are stocks that have lost 10% or more over the past five days and are trading above their 200-day moving average. Our research shows that stocks trading above their 200-day moving average that have lost 10% or more over the past five days have shown positive returns, on average, 1-day, 2-days and 1-week later. Historically, these stocks have provided traders with a significant edge.
Amazon.com (NasdaqGS:AMZN - News). AMZN's PowerRating (for Traders) is 8.
Bearish
Stocks Up 10% or More: These are stocks that have gained 10% or more over the past five days and are trading below their 200-day moving average. Our research shows that stocks trading below their 200-day moving average that have gained 10% or more over the past five days have shown negative returns, on average, 1-week later. Historically, these stocks have provided traders with a significant edge.
Continental Airlines (NYSE:CAL - News). CAL's PowerRating (for Traders) is 3.

Labels: AMZN, CAL, GFIG, NE, SA, SPWR, Trading Ideas, XLE

The background evidence of the week was somewhat mixed and of the type that could always conjure the spin doctors of Wall Street to don the bear goggles. Make no mistake about it though, a decisive shift in investor psychology opted to embrace the bull at large, with the end result fresh multi-year and all-time-highs. For the five day period S&P500 ($SPX) and NASDAQ Composite ($COMPQ) are up 1.49% to 2.82% on sure signs of investor satisfaction.Aggressively lower energy prices certainly helped market bulls this week. It’s not always the case, as the relative weakness and potential earnings concerns over the ‘profit-engine’ of the energy complex (XLE, OIH) need to be ignored or used as the proverbial sacrifice fly, so that other sectors may prosper. That was the case this past week as Black Gold slid precipitously to two year lows. At the same time, the West Texas ETF (USO) fell by -9% to fresh all-time-lows of 43.50 before closing off -6.69% at 44.63. Abnormally warm weather in the northeast, continued bearish build ups of inventories, further not-so-smart institutional monies rotations and trader skepticism over OPEC cuts all played a part in the action. Meanwhile, concern over the ‘price drilling’ being an actual harbinger of a weaker economy dissipated and lost favor with a giddy Wall Street and other data saying something else entirely. After a couple warnings curveballs thrown in the week prior, the official start to the Q4 earnings season was a bullish catalyst for the market. While it’s still too early to determine any type of trend, lowered expectations for Corporate America and a cautious investor mood have been countered by strong results and outlooks from the likes of Alcoa (AA) and Genentech (DNA). While the 22% growth seen in the third-quarter isn’t likely to be matched, bullish reactions to upside surprises thus far do suggest sufficient pessimism coming into the period. Now all Wall Street needs are 450-plus reports from the S&P500, to see if they’ve got it right.One place Wall Street seems certain it has it right is a rotation into large cap technology. An outsized 2.82% gainer and a second straight week of outperformance is a testament to that belief of value found, four plus years into the broader market’s Bull Run. However, as a further testament to a market still composed of stocks and obviously not tolerant of disappointments: sales warnings out of veritable tech names such as Tellabs (TLAB), SAP (SAP) and Advanced Micro (AMD) were punished by investors. While the initial broader market concern / impact was shaken off each time and ultimately favored the “Buy, Buy, Buy!” routine, some canaries outside of the coal / energy mine have been spotted and possibly worth listening too. It also looks like Wall Street is in the mood to embrace strength outside of the corporate kind. Economic data this week contained potentially damaging information for bulls insistent of rate cuts. However, when all was said and done, the market reacted favorably to a stronger economy and one not in need of the Fed easing monetary policy. Friday’s much stronger-than-expected .9% retail sales increase solidified traders shift towards relief over an economy that’s showing more signs of bottoming without further intervention. In fact, some analysts feel the data could point to an upward revision for the Q4 GDP. The bond market is listening as well. Fed funds futures are pricing in almost no chance of a cut before May and treasury yields soared to their best levels in more than two months. The widely followed 10-Year closed at 4.77% and up 13 basis points on the week, but below the key 5% level and a point where another kind of market intervention might come into play.ON TAP THIS WEEKInvestors received an equal dose of high profile surprises and warnings last week, but all told the total count of less than a handful makes for a clean slate as earnings intensify this week. The holiday shortened work-week will have plenty of high-profile names in a myriad of industry groups. Currently, earnings expectations are riding low as Wall Street makes provisions for the end of thirteen quarters of double digit growth from the S&P500. That’s likely to happen, as much of that success was directly linked to the oil patch, which has lost more than a bit of its energy mojo. Financials, also a very heavily weighted group, will likely surprise to the upside as deal making and the capital markets have been benevolent overall. It’s anticipated though that much of what the market does in the coming weeks will be riding heavily on the current rotation into large cap tech and the NASDAQ. Investors won’t want to see further disappointments from that group with so much money now obviously betting on a confirmation of those actions. As mentioned prior, expectations for the Fed cutting rates before May are down to a near zero vote of confidence. The economic data of late has shown both a tightening labor market and enough resilience in the manufactured slowdown to keep interest rates on hold and possibly even nudged up if conditions persist. The current environment is taking place as well, in a market that’s seen hard declines in physical prices of underlying commodities. That means that should those prices firm, an additional force could also be at work, as to keep a rate cut out of the equation for 2007. The week is full of fresh data on both the inflation and growth fronts, so economic watchdogs should make sure to keep note of what’s on tap by looking at the schedule below. What does a rate cut or none offered actually mean to investors? The underlying theme that a reduction is good for the market will always have a home on Wall Street. However, the current popular vote—as evidenced by higher stock prices—is geared towards wanting an economic turnaround despite some concerns over higher price pressures. Until yields move to levels that are deemed attractive enough to pull the rug from under equities, Wall Street can apparently have its cake and eat it too.
TuesdayEconomic: NY Empire Index (20)Earnings: Ameritrade (AMTD), Forest Labs (FRX), US Banc (USB), Wells Fargo (WFC), Intel (INTC), Linear Tech (LLTC)
WednesdayEconomic: PPI & Core (.6%, .1%), Ind Prod & Cap Util (.1%, 81.8%), Weekly Crude, Beige BookEarnings: AMR (AMR), Freeport McMoran (FCX), Lennar (LEN), JP Morgan (JPM), Apple (AAPL), Lam Research (LRCX), Washington Mutual (WM)
ThursdayEconomic: CPI & Core (.5%, .2%), Housing & Permits (1.575M, 1.510M), Weekly Claims (315K), Leading Indicators (.2%), Philly Fed (3.0)Earnings: Bank of NY (BK), Continental (CAL), Harley-Davidson (HOG), Jeffries (JEF), Knight (NITE), Merrill (MER), United Health (UNH), Cap One (COF), Cree (CREE), IBM (IBM), Molex (MOLX), Xilinx (XLNX)
FridayEconomic: Michigan Sentiment (92.0)Earnings: Amcol (ACO), Citigroup (C), General Electric (GE), Motorola (MOT), Schlumberger (SLB), Suntrust (STI), Satyam (SAY), Johnson Controls (JCI), Fastenal (FAST)
Chris Tyler

Labels: AA, AAPL, AMD, AMR, CAL, DNA, FCX, INTC, JPM, LEN, LLTC, MER, OIH, SAP, TLAB, UNH, USB, USO, WFC, XLE

Only two trading days remain in the year and, in the absence of any market nosedives between now and Friday, bulls will probably be pleased with the stock market’s performance in 2006. The S&P 500 Index ($SPX) has added a respectable 14.3%, the Dow Jones Industrial Average ($INDU) is up 16.74% to record highs, and the NASDAQ ($COMPQ) is up 10.24%.The gains aren’t limited to the large cap stocks of the Dow, S&P 500, or NASDAQ. The Russell 2000 Small Cap Index ($RUT) gained 18.5% and the S&P MidCap Index ($MID) rose more than 10%. In addition, nearly every sector of the market moved higher as well. Steel stocks were among the best gainers. Investor appetite for steel companies rose amid merger hopes and better pricing for the metal. So, despite concerns about slowing demand from autos and housing, stocks like AK Steel (AKS) and Chaparral Steel (CHAP) surged more than 100%. The SIG Steel Producers Index ($STQ) is up nearly 50% on the year. Tech stocks traded mostly higher. Computer stocks led the sector in 2006. The GSTI Computer Index ($GHA) surged 31.65% since December 31, 2005. Internet and software stocks also did well. However, semiconductors did not. The PHLX Semiconductor Index ($SOX) is off 2% and, at 469.97; the chip index is below its 2003 closing value of 508.21 The Dogs of the Dow ($MUT) made a comeback. The investment strategy, which involves buying the ten Dow stocks with the highest dividend yields at the beginning of the year, delivered a 27% return so far in 2006. The advance follows an 8.85% decline in 2005. Energy stocks continued their dominant performance. The Select Sector Energy Fund (XLE), which holds all of the energy-related stocks from within the S&P 500 Index, is up 18%. The gains add to a 23.4% advance in 03, a 31.8% rally in 04, and a 38.5% surge last year. Major oil companies led the rally. The AMEX Oil Index ($XOI) is up 21.4%. Meanwhile, the AMEX Natural Gas Index ($XNG) has added 12.53% and the PHLX Oil Service Index ($OSX) gained 11.1%.Brokers and banks helped lift the financials. The Select Sector Financial Fund (XLF) rallied 17.21%. Commodity-related stocks, consumer staples, retailers, and cyclicals also beat the S&P 500 Index. Utilities, airlines, and gold mining stocks also did well in 2006.
By Frederic Ruffy, Optionetics.com

Labels: AKS, CHAP, GHA, MUT, OSX, SOX, STQ, XLE, XLF, XNG, XOI

It was a little scary at first: we had our nice puts to protect us, but by 9:45 we were already switching to Diamonds Trust Series 1 ETF (AMEX: DIA - News) $124 calls as the market began to turn.
We picked up a lot of bargains (we hope) on the morning dip and dumped a lot of oil positions as that sector took off on us. At 9:58 I said about the oil sector: "A 1.66% bounce is expected and meaningless," and the Oil Service HOLDRs ETF (AMEX: OIH - News) closed up 1.56%, Energy Select Sector SPDR ETF (AMEX: XLE - News) closed up 1.7% and the OGX closed up 1.39% so no worries there either!
We held almost every single one of our levels!
The Dow took a neat bounce right off 12,400
Transports missed by 2,580 by 1.41
The S&P went above and beyond at 1,425
The NYSE came out of it's coma and flew to 9,140
The Nasdaq also made a remarkable recovery ending at 2,430
No help from the SOX, who dropped all the way to 469 (still not good!)
The Russell actually did pull out of its power dive >right at 775!

All in all the day was quite a relief and we took a few more off the table and opened a few new positions:
Cramer is on about Adobe Systems Inc. (NASDAQ: ADBE - News) being unfairly sold off and he's absolutely correct! This is a great stock being given away for $41.45. I was hoping to see it test the 50 DMA at $40, but with Cramer on the case this might get away from us. I like the Apr $45s for $1.75 but I will sell the Feb $45s if they get close to giving me my money back!
We lost the rest of the American Express Company (NYSE: AXP - News) Jan $60s at $2.50 (up 127%).
ConocoPhillips (NYSE: COP - News) Jan $70s stopped out even at .80. We picked up the $75 calls for $1.25 to cover our remaining puts and they finished the day up a dime.
Chevron Corp. (NYSE: CVX - News) Jan $70 puts stopped out even at .30.
eBay Inc. (NASDAQ: EBAY - News) Jan $32.50s were added at $1.10 (I wasn't as quick as Soccer!).
I took the FedEx Corp. (NYSE: FDX - News) July $120s for $7 and sold the Jan $115s for $3.50 -- a last minute change of plan!
Corning Inc. (NYSE: GLW - News) seemed cheap with the May $20s at $1.60.
We played Google Inc. (NASDAQ: GOOG - News) $490s from $5.40 to $6.70 (up 24%) but lost .50 of that gain on the Jan $430 puts from $4 to $3.50.
Intel Corp. (NASDAQ: INTC - News) $20s were entered at $1.05.
Marathon Oil Corp. (NYSE: MRO - News) $90 puts were initiated at $1.20 but I expect to take a DD closer to .60!
I sort of doubled down on the NASDAQ 100 Trust Shares ETF (NASDAQ: QQQQ - News) $45s but I took the closer quarterlies for .10!
Toll Brothers Inc. (NYSE: TOL - News) Jan $32.50s were taken off the table at $1.65 (up 32%) ahead of earnings as it wasn't worth the risk.
Energy Select Sector SPDR ETF (AMEX: XLE - News) $59 puts were another victim of the oil pump at .90 (up 38%).
ExxonMobil Corp. (NYSE: XOM - News) $72.50 puts were taken out at .50 (up 25%) and the $75 puts were cut off at $1 (up 18%).
By Phil Davis

Labels: ADBE, AXP, COP, CVX, DIA, Ebay, FDX, GLW, GOOG, INTC, MRO, OIH, QQQQ, TOL, XLE, XOM