to my world. >> you need to get into the game. >> going to go out of business. and they are nuts. they know nothing. >> i always like to say one more. >> "mad money" you can't afford to miss it. hey. i'm kramcramer. my job is not just to entertain you but to teach and coach. do things have to be good for the stock market to go higher? do we need positive economic news to buy stocks? these are the questions you have to ask about a market that has been up huge lately and only

pulled back lightly today. dow off three points. nasdaq.41%. these questions cut to the heart of what is most confusing about our stock market. so many people both professionals and home gamers are caught up waiting for good news to happen. they don't even think enough about the sesation of bad news that must occur before the good news can reveal itself. in other words, economies like cars don't switch from reverse to drive. they first go to park. and when they get to park that is when you have to pounce. i have never seen the rally begin when the economy is already in drive. the largest economy comes when things are weak and you think the car is about to slam into a

retaining wall and going in reverse. it is europe in the driver's seat. in that scenario anything that stops the accident from happening is going to take your breath away. if you were betting that a crash could occur you were wrong. it wakes up the people who didn't want to be involved. they went in the moment the car stops before it goes into drive. they are the smartest people out there. just check out the miraculous rally. we got that rally because spain's economy is representing by the nation's bounds were cratering. we are at the point where no one can think of a way to stop the car from smashing into the wall. or so we thought. then suddenly we get a forceful comment from the head of the european central bank that stops the crash from happening. 7:00 a.m. thursday morning. the europeans slammed on the brakes and then you had to jump

on board. didn't put the car in drive because you can't. only the germans in this case could make it happen. the germans stop and slam it into reverse. it didn't work out that way this time. let it be known that she supported the central bank's plan to save the bond markets and the euro. that was unexpected which nent car could speed and the rally could continue. so we got a big move up based on no good economic news. we have answered the first question. it's all been taught. that is how it happens. can it continue? how can the car keep going forward? for that we need to see some concrete events. we are facing what amounts newt a clear path forward but a genuine gauntlet. it is going to be incredibly

difficult for this car to get through. first we have to be able to drive around the federal reserve's meeting this week. we are going to have to hear that ben bernanke has a plan to stimulate growth through hiring. i don't know what that plan will look like but i can tell you we won't be able to get beyond this cone without something concrete from the fed. we will fall back from drive, perhaps not park. the second cone is the european central bank. that meeting where we again need a unified and concrete plan meaning the germans are on board. concrete means bonds will be bought in the primary and secondary market when they are issued. if we get that it allows us to do nothing more than advance to the third cone which is friday's unemployment number. as hard as it might be to get the fed to do the right thing

and you come up with something new to get the economy going it might be a hold by the european bank. i have to tell you friday could be the most difficult part of the course. this one could throw us right back down if the job number is down. it might be from a higher level. how do we approach it? first we need to recognize that the best part of the move which started here before we hit the retaining wall might have taken place from where we go from reverse to park and then drive. everything else is on top of that big run. secondly we have to acknowledge that the leaders of our stock market are the stocks that say we will not get through this. look at the makeup of this rally today. we are being red by coca-cola. one of the most defenseless stocks in the book being betted by at&t and wal-mart.

so let's get back to the questions i posed at the top. can stocks go higher without anything good happening in the economy? do we need positive economic news to go higher? the answer is no not initially when we are back here. you only need words to stop the reversing car from stopping in the retaining wall. you only need promises to get the car in drive. 3.6% rally already. from here on the answer is we need real positives. we are not going to make it through this serpentine. it doesn't mean we will be thrown back to where we were last thursday morning. if you look at the makeup of today's stocks you won't see an industrial in the group meaning this could be the end result. i think the odds favor that the serpentine is too hard to get through without bumping the cones. i think you take advantage of the huge gains we had last thursday and friday and ring the

register to raise some cash. this is what i want you to sell. companies that reported poor earnings but rallied anyway because they were part of a broader market move. we might be able to get through the serpentine. clint eastwood got through more. on "mad money" like the highway patrol reckless driving doesn't prove who is right, only who is left. let's lighten the load and see what happens. let's go to will in washington. will. >> hey, jim. >> i'm loving that. what is going on? >> i have a question for you. i want to plop money down in google but i hear there is turbulence going on with a patent issue. >> i'm going to tell you don't

worry. you got lawyers and charged up conversations. it don't matter because in the end apple and google they are not friends. apple and samsung are allies. i know they are fighting it out in court. i think apple is inexpensive. the apple iphone is going to be built and built in huge numbers. i like google because they show what they can do with with a good quarter. everything i don't like about facebook i like about google. i'm going to scott in indiana. >> i just recently got natural resources and i would like to be able to know how to read the industrial sector to know when this stock should be coming up. >> it just takes my breath away. i think that that is just maybe the hardest stock in the world to own right now. i think a lot of people say it is down 36%. i am a gigantic believer that they are going to wipe out coal

in this country. i believe the e.p.a. will go to all the utilities on call and say close them down. let's go to maryland. >> jim, how you doing? >> real good. how about you? >> pretty good. long time listener. i wanted to give you a boo yeah from maryland. >> boo yeah right back at you from that great state. >> i bought the stock a while back and started reading the news about it. all of a sudden apple buys it. i didn't buy enough stock in it. what should i do now? they bought it what should i do now? >> i talked a lot on the show in the morning like the greatest guy in the world. when this came out i said look at this deal. he goes jim it is a good deal.

in other words it is too small. i like apple because they can come up with something that allows you to use the phone same as that company that black strawberry. rough road ahead. i don't think in the end we will get through this serpentine unscathed. stay with cramer. [ male announcer ] count the number of buttons

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back in the old days many years and 30 pounds ago when i was at my hedge fund there were three companies about as cyclical as you can get, dow chemical, dupont. when the economy was weak you shorted the heck out of them. they were your best targets. when the fed started cutting rates you covered those shorts. when the economy first started taking off you bought. because these three companies were commodity plays, making products that were the building blocks for an economic expansion

that was obviously about to occur. as it became clear that our country was becoming less competitive and our economy could no longer be relied upon for robust growth two-out of the three companies decided to take aggressive action. dupont went from primarily a basic chemical company to an industrial product. they came out with products to protect crops and developed a paste that increased the efficiency of solar cells. the flame resistant material worn by firefighters. plus dupont decided to move into health care, agriculture and safety, three themes with huge secular tail winds. you don't hear a lot trying to cut back on safety. it is no longer hostage to the health of this economy or even the world's yet people still

thing it s. that is why the stock is so heavily under valued. one of our absolute -- that is research director you see her. it is just the right time for it. meanwhile back in the day ppg was the old pittsburgh plate glass. what an artifact. this used to be my favorite short on the slowing economy. few things were more cyclical than plate glass for ceilings and cars. ppg made glass for just about eve every. he decided it was just plane wrong. he felt instead that they should be involved with the higher value proprietary chemicals that can't be duplicated by trader

partners that are aggressive in trading practices. things like optical, glasses become sunglasses when you go outside, architectural paints including quick drying versions and all kinds of protective coatings. ppg reported back. the quarter wasn't perfect. this was a big company. ppg also announced the divestiture of the lest remaining commodity business, the chlorine and caustic soda. it is a player that is multiple years of ups and downs ahead of it. it is not terrible to be a commodity player. in good times you can make a lot of money. in bad times your business falls through the floor which is why georgia gulf got oblit rated during the great recession and did a reverse split.

and why people generally play more for the companies because they aren't consistent. thanks to the latest ppg is almost entirely special chemical. 90% of the sales. that means the company is much more likely to be able to weather the continual slow down than it was when it was the pittsburgh plate glass which got blown by the winds of economy. ppg had a pretty good quarter and so did dupont. dupont 3.45%. most because ppg stock was run so much. the stock wasn't being recognized for all the changes. ppg sells for 14 times this year's earnings because of the reshuffling and reengineering it does. dupont trades at 12 times earnings because people haven't grasped the changes that have been made. ppg and dupont have transformed

themselves. what about dow? last season they reported a short fall. unlike ppg and dupont they bemoan the weakness in europe and really said china is not so good. and then the united states june got bad. management was quite colorful about how bad things are all over the world. between that and starbucks it was a head turner. this is not a case of dow being a bad company. it is run by a very smart ceo. you have probably seen him on cnbc. we like that kind of yield. it has a fabulous commodity franchise but that is really the issue here. dow chemical is the essence of a commodity play which would be terrific if we were about to have a world wide economic growth spurt. the company's role is incredibly

low. it has superior factories and products. the problem is that dow's earnings aren't hard to kill. other than when they bought -- for top dollar dow hasn't done much. basic commodities are 40% more. most of that from plastics and feed stocks. you might think this shows it is more highly valued than dupont. i think it is a case where the earnings have to be much lower than expected. however the dividend is so big there is a floor underneath it. dow is getting a high multiple the bad way because earnings have shrunk not because earnings have stayed the same and people want to pay more for them which is what i want which is what happened at ppg. dow not a bad company but difficult business for this time in the cycle. and that makes it a tough stock

to own right now although it is paying you handsomely if you wait for the economy to turn and i think that is many quarters away. with ppg and dupont we have companies giving up on their legacy. versus a company like dow that used to be and remains a terrific commodity player. i like dupont because it is getting a cyclical multiple even though businesses had the secular growth. 52% of pretax issue comes from ag and nutrition safety. i think it has a better chance of being raised. if you think the u.s. economy will come roaring back dow will be down right fabulous. if you think we are going to muddle through like i do and growth is hard to get and getting harder then you can't own dow. here is the bottom line. right now right here the

companies like dupont and ppg seized control of their destinies. they have made their stocks worth buying. look at me, i fixed it up. dow hasn't really changed it. it needs policy makers around the globe to do the right thing to grow the world's economies again. policy makers is a bet i don't want to make yet the bet you'll be making if you choose dow over the reformed dupont or ppg. [ male announcer ] it's a golden opportunity...

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here on "mad money" we are always looking for under appreciated or unexploited ways to play our favorite markets. right now the biggest bull out there is in housing. for years i have been saying that housing would turn in 2012.

now we are half way through the year it is crystal clear that the entire housing business is rebounding. i know last week housing data was regarded as disappointing. new home sales of 350,000, about 20,000 less than expected. first of all that weak pending home number was caused by low inventories. in other words, not enough homes. what about all the unstoppable tide of foreclosures. it looks like we have worked through most of that but the head of realtors begged the banks to speed up foreclosure process in order to get more homes on the market. i always take these broad statistics higher. it is the companies that have their finger on the pulse of the

industry. just last week we heard from two home builders and said orders were up 32%. data specific. 45%. it's jumped more than 5%. i have been recommending that stock for years and it has done nothing. wells fargo which owns 30% of the mortgage business in the united states talked about a real housing when it reported. catterer pillar being off a small base. you might think the logical choice is being a home builder. the home builders have had enormous runs. we are in desperate need of a pullback before we weigh back into the group. we want a housing plan that hasn't come up to much or gotten hurt. we want a still housing play. in short, we want usg, a maker

and distributor of building materials mainly coatings used for interior finishes and ceilings. it is the largest manufacturer of the wall board in the united states. makes up to 25% of the market. the company is a distribution business where they sell various building materials. usg's coatings businesses and the second largest maker of acoustical ceiling tile in the world. i have used it. i wasn't the one who installed it. why does it fly under the radar? last week the company reported 15 cents loss. and the stock blew up. 18% in a single session. holy mackerel. since then people have written off usg's prospects.

usg employed because expectations got up too high. up 89%. in other words, the stock was priced for perfection. it would make you hate usg if you own it. you would say cramer ought to plunge his face in that thing. usg is still earth owning. analysts got too aggressive about wallboard pricing and volumes. usg's numbers didn't meet the estimates. they were plenty strong. new shipments were up 70%. the gross margin is created by 625 basis points. usg expects ceiling business to pick up in the fall. in other words, the underlying trends were fine but the stock had gotten ahead of itself.

everybody is ignoring usg even though it is terrific and you have a good entry point. there is at least one guy who believes in his company. i'm talking about warren buffett. he said he bought a couple of thousand homes because he is a believer in housing. owns nearly 16% of the country. i think it is a strong endorseme endorsement. it has been a real dog for much of the period. not only is it a stealth housing play but has domestic security. company gets 96% of the sales from the united states. a teeny bit of exposure to europe. doing the best to find a buyer. these guys are thinking about how to get you a share holder. usg is not whirlpool which reported a serious miss. the stocks got gains because people got too negative about it and has a ton of cash flow.

cabinets lost 20%. usg is a solid business that benefitted from the rebound in housing. the company missed the numbers last week. this stock's pain is your gain because it means you can buy the stealth housing play at a significant entry point. i would be pretty upset if i owned it going into the quarter. you get to buy it for expectations. that is ideal. housing i got to tell you housing is definitely turning but the home builders have already run so much that it would be crazy to chase them here. that is why we need a stealth housing play, something like usg that makes the wallboard you need to build the home but the stock has been written off. usg punished enough.

i think this company with its sheet rock can be bought at a price much better than it was a few days ago. better than where warren buffett got in on it and better than you should expect. i'm confident that they can be beaten. i want to go to logan in texas. logan. >> thanks for taking my call. >> boo yeah. >> my stock is beacon roofing. the stock hit a 52 week high. i decided to pull that. with earnings coming out next week i was wondering if now is the time to buy. >> you have to be careful because there was big storm damage last year and they will have difficult comparisons going in. i don't want you to trade it. i ended the call. i would rather see you take profits and get into it lower.

if they do it how about jack in texas? >> what is going on jim? >> just painting a little bit. i might sell this for like $500 million. >> boomer center. i'm in texas. i wanted to throw that out there. i had a question about the company amrc renewable energy efficiency company out of massachusetts. i'm a brand new investor, just started in december of 2011. i made about 20% off of zinga investment and i got out early, reinvested in this amerco. i'm curious what you think about the stock, where the industry is heading if i would be safer in something with a dividend yield? >> i look at this. it has a good trajectory. if i tell you i like it more

than pon? do i like it more than a stock like southern where the yield is going to go higher. i like a southern. i like duke with all the controversy and this stock doesn't get hit at all. those are better buys. let's not make it too hard. let's get either down and dirty, cyclical housing names or dividend. as the housing rebound continues strengthen your foundation with the under the radar name of u.s. gem. i think this could be a huge earner. stay with cramer.

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it is time for the lightning round. are you ready? starting with david in michigan. david. >> mr. cramer boo yeah to you. >> nice. >> my stock is hphelmerich and

pane. >> like that stock. i'm saying bye. let's go to joe in new jersey. >> this is joe from nuttily, new jersey. boo yeah, mr. cramer. i'm not far from the shore house. by the way, you always take the local instead of the express. >> i don't know. i have cut over at the gardens. you're right. go ahead. you were just calling on traffic and weather? 105 is right. let's go to frank in florida, please. >> jim, is patience a virtue at this time?

>> the only ppr is blue ribbon. i have a case in the kitchen and i will not buy ppr the stock. let's go to justin in texas. >> boo yeah. this is justin. i'm an under grad at texas a and m. aggy, what is up? >> i want to ask you about titan international, twi. >> offroad equipment i'm going to send you to caterpillar. we are going for the whole shooting match. let's go to alley in maryland. >> boo yeah from college park. >> university of maryland which i love. underarmer. what is up? >> my stock is home depot. >> i'm liking the depot. 51. back and forth. home depot. i like home depot the stock.

i got a great home depot i go to. let's go to florida. >> what is the deal with j wolf. >> we have usf players on the team here. here is the problem. great quarter but didn't go higher. it tells you that stock is stuck in the mud. robert in texas, robert. >> hello. >> robert. >> yes, sir. >> you're up, robert. >> appreciate your show, jim. >> thank you. >> a few months ago you were talking about one and i thought it looked well and i bought stock. since then it continued to pull back. >> it is part of the pull market

morphed into a bare market overnight. i believe it is a long term buy. eden is getting slammed also because of the truck bear market. i want to go to steve in new york. >> triple boo yeah from new york. >> i give you a quadruple boo yeah back at you. >> talking about blowing out quarter guide it up for next quarter. >> i think the trade has occurr occurred. it was terrific last week but right now no. i need to go to mike. i'm done. that ladies and gentlemen is the conclusion of the lightning round. [ male announcer ] let's level the playing field. take the privileged investing tools of wall street and make them simple, intuitive, and available to all. distill all that data. make information instinctual, visual.

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m bara[romney singing]: oh beautiful, for spacious skies, approve this message. for amber waves of grain, for purple mountains majesty, above the fruited plain,

america, america, god shed his grace on thee, and crowned thy good, with brotherhood... before we get to your e-mails and tweets time for some house keeping. last thursday peter from new york called in with a stock that i thought required more scrutiny. he asked about the thing you talk about. a tiny drug company that makes self injection and topical gel

based products. the products include the safety and efficacy of drugs by reducing side effects. there is positive results from the device for rheumatoid arthritis and this data sent the stock flying to new highs. i am worried that it relies on the sales forces of other companies and i feel like future opportunities were baked into the stock. stocks more than doubled over the last six months. i say it is too late. don't be greedy. pure greed at this point. also on thursday i got a really terrific call from eddie in florida about leg. this is a diversified manufacturer of engineered products found in many homes. i bet you something they make is in your house. it is number one and two in your

market. making products for bedding, home furniture and automotive seating. used to talk about it being a great american manufacturer. 77% of the sales come from north america. it has been growing over the last few quarters but haven't been able to translate to earnings growth until this quarter when the company blew the estimates out of the quarter. they also raise the earnings guidance. this is what people wanted from usg and armstrong world. it gives you a 4.8% yield and raised the dividend. it looks safe. valuation seems reasonable and leg seems reasonable. the fact we are getting paid to wait makes me happy. it is worth buying on any weakness. last wednesday michael in new york asking about fnv.

it is various natural resources plays mostly gold mines. i did not know the company. the portfolio includes over 300 royalties. the goal assets are up. they get paid a cut based on the production. the oil properties we mine based in western canada. i am a believer in gold but not in the gold stocks. i'm not going to recommend gold stocks. if you want to invest in gold you stick with the gld. some mail and tweets. let's start with an e-mail. cramer, boo yeah. boo yeah back. is the current price of good reentry level to get back in. >> one of the great guys to bounce these off sets off last

week. there is too many casinos in this world right now. which makes it okay. i can't pound the table. here is one from john in florida. hi, jim. i'm a big fan. i watch you every day after work. what is the deal with wind stream? i'm very confused. please shed light on this. they didn't do a good job in the last quarter. i have to find out what is going on. century link had ctl which we pro filed when we were too lame in 2010. by the way we also recommended show group when we were at tulane. that is the play century link. if you bought it because of me ring the register. the trade is done. done, done, done. let's take our first feet from@clay lauren 2001. he writes new follower. love the show. which would you prefer, acc,

american campus communities or edr? i have liked the acc. i like the sec more than the acc. i thought acc was good. it has not been as great as i like but i recommended it early on and i continue to believe it is a pretty good stock up 13%. here is a tweet from actually ben as opposed to not actually ben. he writes when it comes to stock and advice you are always my first port of call. this is no doubts because there was some stock i'm not going to mention names. i just read a headline and said they are worried about some fda label. i came right back at them. why do i do that? because i like to. my "mad money" back after the break. [ male announcer ] drive a car filled with as much advanced technology

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is what is good for natural

gas bad for lufkin. it got hammered for reasons. southwestern energy capital roaring higher among other natural gas. these are two sides. what is going on? you may not know lufkin but you know about their products, the dunkies that go up and down to pump out the oil or natural gas. it is part of the nat gas food chain. as the services shift towards the oil in the country and away from natural gas we have no place to put the stuff unless we stop drilling. what is so surprising about the action in the major nat gas games they rally because we are not drilling.

energy mixing. energy transfer partners. and it is difficult to include anything than the glut will be cured by the excessive heat. natural gas market has been a real bust after the past couple of months. we know the natural gas company is up. the first is not so hot. the second is better one. we know that exon mobile seems like it is paying top dollar not long ago. an analyst had the odd asity to challenge. could it be a chain that will be soon over. a little more lasting than the trade except it is bottoming for bad reasons. the marginal demand is coming from the heat. air conditioning is running around the clock. utilities use natural gas as a

peak fuel. otherwise coal remains the true base load fuel. now, unless president obama is reelected and gets the e.p.a. to close all coal plants i think the demand will be. the commitment to use natural gas as a service fuel and the company to do the most to promote it is exxon. it can be used for buses. that means the supply shut in plus the heat is creating the rally. more drilling plus cooler weather will reverse the trend. it is the demand side that much change before we call any bottom more than a trade. stick with cramer. this is $100,000.

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