and share... faster than ever. ♪ it's time to do everything better than before. the new blackberry q10. it's time. >> my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to save you some money. my job is not just to entertain you, but to teach, coach you, so call me at 1-800-743-cnbc. you know what we haven't had in a long time? a day like today. a day where pretty much

everything went wrong that could go wrong for stocks, which is why the dow plunged 225 points. s&p plummeted 1.43%. the nasdaq nosedived. to understand what triggers a sell-off of this magnitude, you have to recognize that this market has multiple inputs and at times, these inputs flash bright red. today was, indeed, a bright red day. let's go through the information that the market uses to determine prices on any given day, because i want you on the same page as me, understanding this stuff. first is what we call the macro, that's broad sets of economic data that trigger reaction of the stockmarket and the much bigger bond market. on thursday at 8:30, we get those jobless claims. they were the lowest in six years. not so fast. it's good for the economy. but it's not necessarily good for the stock market.

what happens when we get really good macro news like these jobless rates? immediately, interest rates go higher. you got to pay more to borrow money when things are improving. interest rates reached a high. key government treasury, we call the bellwether bond, a term that's from the bell around the neck of the ram that leads this sheep flock shot up to 2.76%, a 30-year bond, flew up to 3.8%. both of these levels signify important increases that have historically caused a slowdown in future business. but you might ask, isn't the fed supposed to be stopping the process? isn't the fed supposed to be helping things out here? doesn't the fed want rates kept low so more job can be created, more homes can be bought and purchased and so on? the answer there is yes. that's the fed's goal, but if the economy is turned, jobless

claims, six-year low the fed is done, right? that's what people are thinking. plenty of people think that's the case. they're anticipating the end of federal largesse, adding to the bond bonfire. normally, we shouldn't be too concerned about this interest rate rise, it would typically mean earnings of companies we care about are getting better at the same time. it stands to reason that there will be more consumer spending, right, if more jobs are created. so that positive can overrun the interest rate negative that give stocks a lift, no? today, though, we got not one, but two high profile earnings disappointments that totally befuddled the market in light of this macro data. the disappointing numbers from cisco. that's a tech company, and from the biggest retailer in the world, wal-mart. these two dow stocks were hammered, with cisco shedding $1.89, wal-mart losing 2.6%. it could have been bigger,

dropping from $76 to $74. these inputs produced a lot of bad pin action for a host of stocks and industries. understandable since it looks like we are getting the penalty of the high interest rates in the stock market without the benefit of higher earnings estimates at the same time. we're cutting the estimates. that's a toxic brew. like swimming in the love canal or the gowanus, a super fund site. can i explain sisco or can you follow by pointing out the company actually did report a fantastic number. then they were attacked on an outlook too conservative for the stock's own good. i can put into context the layoffs they announced the company has been on an acquisition binge. you need to trim after doing those deals or you will have way too much middle management fat and by the way, may i just say, sometimes i've almost felt the outlook was deliberately more

negative in order to perhaps justify these 4,000 firings, and i know that john chambers is a decent man and that wasn't done easily. if cisco hadn't been up 25% for the year, well it was up 34 cents going into the quarter. it had been up say half of that, i think it would have gone higher today not lower, because business is so good the stock is very cheap, especially when you consider the earning, growth and 2.8% yield, i still like it. but i can't explain wal-mart because the numbers for the chain where 100 million shoppers spend money every single week didn't look good at all. wal-mart ratcheted down expectation levels with a slowdown in consumer spending. again, that's the opposite of those macro inputs are showing. could it just be wal-mart? are they screwing up? you might think that. but then again, remember, macy's reported downbeat numbers just yesterday. if either one was lackluster, i might be able to reach a judgment the fault isn't the

consumer but the execution of the enterprise, but both companies are well run and their conclusions too similar to sell, sell, sell. >> the house of pain! >> after big gains the market reacts suddenly, a trend reversal, something we learned in our chart week series, that continues later in the show. we saw gold zoom up 30 bucks as the macro follows the economy is so strong it could be bringing back inflation. >> boo! >> gold is down 28% from its record high two years ago. see, this rally took people's breaths away, could there be that much inflation? oil ran up again, ticking up to 107. so at the same time that interest rates are rising, impacting the cost of everything from buying a car to a house to lower refinancing, the consumer has to pay more at the pump. this is not a good picture, ladies and gentlemen, in the meantime the shock waves from cisco and wal-mart were felt far and wide, even when they are

focused on telco and the internet and many companies are doing quite well. we learned from adnet, wal-mart drove down better numbers. that's all well and good. i know what you are thinking. all right, jim, that's great, the history of the day. what will happen next? first to get back on a bullish course, we obviously need interest rates to retreat, top out and come down. we need data from other companies, particularly the ones that do business overseas. they show earnings are in fine shape and maybe improving for some companies, given stocks have already come down, expectations have come down with them, that is a real possibility. don't take the bullish scenario off the table. even the jobless claims are going lower, that doesn't mean the economy is overheating. i thought that was simplistic. i hope the gold move, you know what, every dog has its day. remember, i always think gold should be a part of a portfolio. all right, that would be the god way out of this jam.

you can arc you we've reached a point where rates are high enough, stocks are low enough to mount a decent rally if we get a better combination. the other way out of the jam, though, the odds on way, that's a lot more painful. >> the house of pain. >> first stocks have to go down more to reflect the negative inputs i told you about, higher rates could be insidious. steals buyers from the stock market. people want stable yield and don't want the price risk. remember, stocks can go down. plus, we need to pay less for future earnings, higher rates signals more inflation. paper assets as opposed to gold don't hold up well. we know that empirically. in the meantime, wall street analysts have to start cutting their estimates, with we all know causes stocks to sink lower, without a break in the price of gasoline, some sort of tax practice to make up for the higher payroll taxes all of us are paying the consumer won't be less strapped months from now, worries about a potential government shutdown or a debt ceiling imbroglio. so what do we do? i continue to harp on the theme that we have no real leadership

to the stock market, but we do have massive gains. i know that we've raised some money ringing the register on big gains from my charitable trust. we are weighing lower trusts. you may want to do the same. nobody got hurt taking a profit. let's remember that. here's the bottom line, we will get out of the penalty box, there is a reason interest rates go down, stocks benefits after the last climb we have, lower stock prices is within the realm of the possibility, so please plan accordingly. al in new jersey, al. >> hey, jim, a friendly jersey boo-yah to you. i'm calling from west orange. in fact, i was in summit at the broadway and talking about an investment in the clothing industries. i had four comparable companies that are bullish from september to all the way to the end of april. so i wanted to ask you about a favorite of yours, ross stores. >> i'm about to report, let me tell you about the problem with ross stores. okay. we are seeing even the absolute best retailers go down. so if i see ross stores at $64.89 and it does go down,

another couple bucks, i probably wouldn't want to pull the trigger. remember, every time a retailer reports, and it's bad, they punish them again, why not get ross as cheaply as possible down 12%, 10% or 12% from a 52-week high, which would put it 62.63. that's where i like it. charles in minnesota, charles. >> hi, jim. i love your show, first time caller. >> thank you. >> since pharma hit an all time high yesterday. i never sold a share. i owned it 15 years, i'm looking to taking 50% to 75% off the table. my broker says i have too much. 25% of my portfolio is hormone. >> i'm not going to say you have too much. i was going to say that if you had more than 20% i would take it off the table. hormel is a fine firm. it is the best acting food stock. i got to tell you, that is one fantastic management. if it goes over 20%, take some off. otherwise, hormel, one of my

favorite stocks in this market. one of the longest paying dividend payers in the new york stock sheet. there are bell bottom blues, as clapton taught us. i love clapton. then there are bellwether blues, we will get out of the penalty box, one way good, one way bad, why don't we plan accordingly? "mad money" will be right back. coming up, perfect prescription? perrigo is behind many of the generic drugs you see on store shelves, but a big acquisition has thrust this company into the spotlight. tonight, cramer is getting the scoop on what this transformative buy could mean for the stock when he speaks to the ceo in his earnings exclusive. and later, choppy waters. summer usually means crowded beaches, so why are they all empty? because chart week is making a big splash. tonight the pack hunters have arrived. cramer's found two species of stocks circling the sea.

one points to a hot trend fueling the future, but swimmers, beware. the other can take a bite out of your portfolio. all coming up on "mad money." ♪ [ agent smith ] i've found software that intrigues me. it appears it's an agent of good.

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>> what's happening with perrigo? one of my favorite private label plays. it's a maker of knockoff store brands, over the counter and prescription drugs. at the end of july we found out perrigo is requiring elan for $6.7 billion, in part because the deal will allow them to buy them with corporate tax rates much lower than the united states. the results came in lower than some wall street analysts were expecting. it was 3.25% today.

could the wea ness be a buying opportunity? perrigo has given you an astounding 107% gain since february of 2010. that kind of move makes you inclined to give the company the benefit of the doubt, i hope. let's check in with the chairman, president and ceo of perrigo, hear more about the quarter and how his company is doing. good to see you. all right, cut to the chase, when i saw the news that you bought elan, it seemed like something i didn't expect. i have to admit. i know that you believe the combination will give you future growth. if you can lay it out. it's different from what we hear from perrigo. >> we liked elan, the first reason it, enables our global growth and expansion strategy. that was one of the important things. number two, it gave us the opportunity to have access to an escalating royalty stream, which is a very important drug for ms,

and then the third reason for us is it would be an irish domiciled company. it does have an influence on our tax rate. it will generate cash for us for the future, it will generate additional m&a for the future. >> let me ask you this, a guy i know has done this. why doesn't every company incorporate in ireland that can? it's such a good thing for shareholders. >> i think every company has to make their own decision, of course. for us, we looked at the assets specifically with elan and what we put with the elan assets, what perrigo has, put it together and we let that synergy, operational and tax synergies be clear. we think there is $150 annually. a big number. i think every company really tries to make their own decision on that. we are excited. we think it's a good opportunity. clearly in the words of synergy, we think one plus one can equal three or more. >> i was surprised to see a very big number up. very clear. now, let's talk about growth. some people are worried about the consumer health.

i always look, every time i've seen people worry about it, i said, you don't know what the company has up its sleeve. i have been right, the doubters have been wrong. tell me about the new products. some analysts were disappointed it's going to accelerate here. >> sure. the total business, as you said, jim the total business was up for the quarter 16%. 12% for the year, we were excited about that, more importantly, as we think about 12% to 16%, somewhere in that range in the upcoming year. relative to the question, you are right, though, it's always going to be about three items worth. the first one is about moving the products from the prescription status to otc. it is happening. >> a bunch are happening in 2014 time frame. >> absolutely. we are seeing more and more products, in fact, there was one for overactive bladder that got a recommendation to move. we're excited about. that the second thing is about the movement from national brand products to store brand. that continues as well. what we are seeing there, latest 52-week data, is we are growing store brand about 6%, 6.4%.

the total category is going about 3%. we're growing twice the rate of the total category. and then for us, the third reason is going to be about these new products. we expect to launch more than 75 new products this year alone, just the next 12 months, representing over $190 million of new product sales. we're excited. >> the one that always sticks out for me, because i pay a fortune when i buy the branded, is this mucinex. this seems to be the one that moves the needle. why does that move the needle? >> first of all, it's a great product. credit to the brand. we came out with a store brand equivalent of that product. indeed, we'll offer that product for approximately 25-30% less than the national brand with the same efficacy and safety as a national brand. it's a big product. it's a big family of products. the product we're after is approximately $150 million of national brand opportunity. the total family, which we're looking at additional products, is up to $600 million of opportunity, that we'll be rolling out in the future.

>> that's just a huge amount of dollars up for grabs. >> absolutely, big opportunity. >> speaking of big opportunities, china and infant formula is gigantic. you talked directly about china regulatory problems hurting things. the chinese don't want our, is this again discrimination against american companies? what is going on there? >> china, first of all the demand for infant formula made in the u.s. in china is astronomical. >> safe. >> they want good, u.s. manufactured products. however, there have been changes in the regulatory environment. our products are approved in china, but they change. already some changes they require in labelling. there are labeling requirements that we have to continue to meet those standards. we are continuing to meet those standards as we, you know, requested by the chinese government. but that changes a lot and we're trying to stay up to it and that's something we're constantly following. my team is working really hard at that to insure we will have a good product, good labeling,

indeed, meet demand for the product required in china. >> i got to tell you, this could be an exciting time. i want to follow you guys. i want to see how this works with ireland. i thought your presentation was very convincing. i'm never worried about the evolution of the company, because you made it and made it and every time that someone's gotten off, they've made the wrong decision. it will be wrong to get off now. that's joe popp from perrigo, a great growth company, remember, growth, how many companies do we have that still are giving you that kind of growth? after the break, i will tell you how to make more money. coming up, choppy waters, summer usually means crowded beaches, so why are they all empty? because chart week is making a big splash. tonight the pack hunters have arrived. cramer's found two species of stocks circling the sea. one points to a hot trend fueling the future, but swimmers beware. the other can take a bite out of your portfolio.

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>> after getting pounded for weeks, the price of natural gas actually went higher today on news of smaller than expected inventories, even as the stockmarket got pummelled. since this is chart week on "mad money," we're going off the charts to see if natural gas has what it takes to make a major move at last higher.

it might seem difficult to imagine, carly, the founder of carly trading and first book on commodities and realmoney.com believes that nat gas could be poised for a serious rally. i hope you understand how bizarre this is. before we get started, i'd be remiss if i didn't thank all of you home gamers who got in on that hashtag chartnado action this week. still a fantastic chart week. we are giving you a double dose of charts. why is cramer so bullish when natural gas seems to be in a glut for years. all over the fact that our government refuses to buy incentives to switch to cleaner, cheaper, more domestically abundant fossil fuel, they don't like them. natural gas would help our company break its addiction to opec. first of all, garner points out

that from a seasonal perspecttive, natural gas experiences a meaningful low, either in late july or early august. it then starts to spring back. utilities start stocking up the commodity for the coming winter, to heat. that's still the biggest use. natgas builders tend to build it ahead of the season than waiting for it to come. it arranges an uptick every year. at the same time, garner knows speculators like to get bullish going into hurricane season, as a bad hurricane along the gulf coast can shut down production causing prices to spike. then, of course, there is chartnado. check out the daily chart of the price of natural gas futures. look at this, gas prices come dramatically oversold. look at this, it is like it never lifts its head. when any security gets oversold, a swift rebound can blow out all the shorts. as of last week, large

speculators the big investors were holding 125,000 contracts. guys, that's extremely bearish. i almost fell over when she showed this to me. garner thinks we could get a rally. would push the price of natural gas higher. make no mistake, we will look at that by looking at the bottom of this chart, at the relative strengthg index the rsi and williams percentage r oscillator, we talked about the rsi many times going off the chart. it's a momentum indicator. that's the way many of the percentages are. larry williams, similar to the stochastic generally used to measure whether a stock has gone overboard or oversold. for natural gas, it's in huge oversold territory, you can see that, just as important, they're starting to move higher, you can see that, technicians look at these signs, which a technician like garner could be foreshadowing a rally in the underlying commodity. they have been trading in a fine

downtrend since may. the bottom of the channel has been supplying support for nat gas that's held multiple times. the reason i know this, 324 is real. natgas got hammered last week on news than a larger than expected increase if inventories, prices reversed to end the same day in positive territory and above the crucial 320 support. this pattern is what garner calls a key reversal, okay, this was a key reversal day. all right, sorry, i obscured it. that's a key reversal day. it's very simple, yet surprisingly reliable indication that a trend change could be imminent. the key reversal days in stocks. i talk about them all the time. this low last week could mean that natural gas is about to go from a bearish downtrend to a bullish uptrnd. i am agreeing with this. why is this so important? according to garner, at the moment where the price breaks down, excuse me, which is what happened a week ago, the bullish traders get triggered causing what is arguably artificial selling.

meanwhile, weaker hands who can't take the pain tend to get washed out by this kind of move lower. that's where the weaker hands blew out of it. okay. this leaves you with a giant net short position in something that's already, put this together, giant net short position right here that's already really oversold right here, so once bargain hunters step in and short covering starts, well, i got to tell you something, the bulls who were stopped out scramble to get back in. that's how you get a really powerful move, garner says it turns out she thinks it won't go below 310. that will be an absolute gift for bulls. this is it, she's calling the bottom here, it's gutsy. how high does garner think you can get? can we make some money here? she sees the ceiling of resistance at $3.47 on the daily chart, which represents the upper end of the downtrend channel. nat gas will be able to punch through that level thanks to seasonal strength and the fact

that the fossil fuel is at historically cheap prices. assuming it happens, something garner feels is likely, we need to think where the next stock is. in the weekly, this is extraoridinary. in the weekly chart, look at this, the big resistance at the top of the downtrend chan sell at 380. so that's the next key area. but again, garner thinks it's possible, nat gas can break out through that ceiling, too. next up, 440, retested in july highs, money a buck higher than where natgas is now. for garner, that could be where the rally is at. we want to make that, don't we? we get fresh positive developments, they can go higher. if something positive happens, draw downs on weather concerns, she says ultimately, are you ready, ski daddy? we're going to 520, you know how much the natural gas companies would make if that happens? if it turns out garner is dead wrong, most of the people are

wrong, she doesn't see much support when commodities gets to the 260 area. that would be bad. she thinks that is a highly unlikely scenario, given there is a slowdown. it kept the supply in the market. these guys can't make money here at these prices, they're not drilling. chart isn't driven by carly garner who has been on a roll lately, suggests natural gas can be due for a significant move higher. this is contrary, people, even a major one as we head into the actual. you know something, i would not be surprised if she were dead right. dave in california. dave! >> boo-yah, jim, from california. how are you? >> real good, how about you, dave? >> caller: great. great. jim, last week, news was coming outs of mexico and saying they are finally serious about overhauling their oil and gas industry and lifting a 75-year ban on foreign companies investing in their antiquated oil and gas industry. a stock i already own and have a small profit on right now is weatherford international, which

even without a new oil gas build out renaissance i think is a giant stock for the future. should i hold on or back up the truck now? >> no, don't back up the truck. it's well run enough. look, i think a rising tide will lift all drilling companies. so i sell, please don't buy more, there are other high quality companies and weatherford historically has not been able to deliver on the promises of very big finds. he's not nailed that down yet. i think it's important that he nail it down. i think the interest could give him a run for his peso. may i speak to richard in florida, please. richard. >> caller: hey, jim, i want to give you a boo-yah from miami, florida. >> nice. what's going on? >> caller: hey, a question for you. what do you think petrobras is going to do six months from now? >> so far so good. i think this company can go a lot higher. 17, maybe 18 by then. that wouldn't shock me.

they've got really good prospects, they are starting to drill. i need david in virginia. david. >> a united states treasury boo-yah, jimbo. >> holy cow, your spirit is overwhelming, it's certainly infectious. what's up? >> caller: you wrote in your book on the confessions of a wall street addict. love it, man. next thing to know. should i pull lng and switch over to gl? you talked about get glts. >> gas and liquids? look. they're both, one's a yield play, cheniere. it's not a client. chart is not a supplier there. i think the world of chart. i wish we had a huge pullback. you want to ring a little register on it. i hear the music for chartnado.

our look at natgas charts with carly garner says it's going higher. stay with cramer. coming up, fear factor. chart week continues with a predator that could be ready to shred your profits. don't move, cramer's arming you with the tools to ward off this hammerhead. [ male announcer ] come to the lexus golden opportunity sales event and choose from one of five lexus hybrids that's right for you, including the lexus es and ct hybrids. ♪ this is the pursuit of perfection.

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it is time, it is time for the lightning round. rapid fire calls. buy, buy, buy, or sell, sell. are you ready ski daddy? i want to start with lowry in north carolina. lowry! >> caller: jim, yes, haines grand, tell me what you think of it for the next rest of the year. >> i think it's a terrific stock. i know next week we will hear from some apparel companies and retailers. why don't you wait until they talk? maybe more numbers get cut, then

buy hanes, hanes numbers aren't getting cut. let's go to brian in new york. hey, brian. >> caller: hey, jim, which stock would be and what do you think of stg? >> the eagles are google and netflix the eagles are also eog, the other stocks aren't. they're nothing. okay. sbg i don't like. why? because it only yields 3%. i need to get 4% on that because the reits are coming down before i want to pull the trigger. the eagles are most takeover names. let's go with dan in connecticut, please, dan. >> mr. cramer, a nice sunny norwalk, connecticut, boo-yah to you. >> the best in the east. >> caller: hey, i have been looking for a nice speculative play to add to my portfolio. one stock i caught was calloway golf. they added a new ceo, a nice new game plan and hot product line.

do you think callaway is subject to a nice takeover? >> i don't recommend it if i don't trust the fundamental also. you did portray it as a spec. i will bless that you bought it. you got some homework. let's go to nick in oregon. >> caller: boo-yah, jim from portland, oregon. >> wow, man, we love portland, oregon. love to do the show from there. water up? >> caller: i have been using your recommendations to guide my investments. the best one i want to revisit, domino's pizza. >> i was on fantasy guru today, doing a little radio show, and he asked me, what football team is what? i said this domino's pull back delivers. i pull the trigger. let's go to mark in michigan. mark. >> hi, jim. >> hi, mark. >> yeah, a big detroit tigers baseball boo-yah to you. hello. >> yeah, go ahead, man, you are up. >> okay. my question is about general mills. >> oh, you must have been listening.

i would say at 49, i don't care for buying it. that's my level. 50 got the points. james in new york. >> hi, jim, boo-yah, how are you doing? >> really good, thank you. >> fine, thank you. my question is about sonic drive in restaurants. they hit a recently 52-week high. they seem to be expanding. i want to know if there is any more upside to this stock. >> blooming brands, red robin gourmet, red robin gourmet burgers and yours, sonic, are all en fuego. if they pull back, you've got to do some multiple buys. that's the strongest good buy in the market other than the natural foods group. let's go to allen in florida. >> hey, how are you doing? boo-yah, to you. >> this is allen from delray beach, florida. i want to know about jazzo and the 96 million direct registered offerings? >> i'm not jazzo about jazzo at

all. i'm a seller. tyler. >> hey, how are you doing? >> not bad. >> i was wondering to it would be a good idea to invest in abercrombie and corporation. >> i can't tell what my kids want to by there from yesterday to tomorrow. how can i recommend a stock like that? i mentioned hollister, they tell me let's go buy hollister, next day they said, dad, i can't go to hollister again. i can't mention that stock. >> hi, mr. cramer. thank you for taking my call. my stock is occidental petroleum. >> my charitable trust has a big position in occidental. we believe in the interim the quarter was a mess. they are drilling a lot in the permian, they do have a gigantic position in monterey if governor brown lets them drill, occi goes up on earnings. otherwise, they need to split up into the various division, that, ladies and gentlemen, is the conclusion of the lightning round. >> the lightning round is sponsored by t.d. ameritrade.

tomorrow kick off the trading day with "squawk" on the street. live from post nine at the nyse. >> i got these socks at kohl's. >> i got these socks at kohl's. this is like the 17th wearing. h]

>> i'm never getting tired of this one. with the markets getting beaten today, how shocked out should we be? is it more of a garden variety pullback. we need to consult the fear index. aka the cbo volatility index or vix for short. we're going off the charts again. consider this the hashtag chartnado portion. mark sebastien, the chief

operating officer. so does that mean it's time to freak out? not so fast. the thing about using the volatility index is it's all relative. sebastien points out ordinarily the vix and fortune 500 is supposed to move in opposite directions. when the s&p gets hammered, it should surge, with is exactly what happened. sometimes this relationship breaks down. that can be a sign that whenever trade happens to be dominating the stock market at that moment, it doesn't last. so before we get to today's action, let's go through some examples from the recent past that let you understand what sebastien is getting at. first consider what happened when the s&p 500 plummeted in late june and the vix surged. the market is down. remember, that was the big interest rate scare. in just a few days, it dropped from 16.40 to the 15.60s area. meanwhile the vix, as it should, exploded higher. that's just what should happen.

at the time sebastien told us that the market wouldn't bottom until the s&p pulled back and the vix failed to go higher. failed. because when the correlation between the two breaks down, that's a classic sign that the move, whatever direction it's in, is over. sure enough, on june 24th, the s&p tanked at the open, making a new low. vix failed to make a new high, that was the tell. this is great. when you zoom in on an hourly chart that covers thursday, june 20th through monday, june 24th, you can see that during the day that monday, the vix actually sold off dramatically in tandem with the s&p. that should happen. remember, the vix and s&p 500 should go in opposite directions. when that correlation is up. when this correlates, these are supposed to go in opposite directions. this went down and that went down. that's how you get a trend chase. i'm sorry i misspoke there.

that's exactly what happened on june 24th. we bought the fabulous bottom, with the action in the volatility index predicted, he predicted, in other words, as long as the markets going down, this should be going higher. suddenly the market is going down, this went down with it. that was the correlation that broke. okay. so now fast forward to today, check out this daily chart. if this current selloff has some legs to it, now 3% off its highs, sebastien would expect vix to be soaring. but that's not what's happening. instead, the volatility is rising off a slow level. now we got to zoom in again, let's zoom on on the action yesterday and this morning. we see something similar to what happened in june. today the s&p 500 opened down. here's the s&p 500, opened down, they made a hard move lower, touching 16.60 at the same time that the vix spiked to nearly 15. that's supposed to happen, merely 45 minutes later, the s&p threatened to pull back to 16.60 again, right here. threatened to pull back. but the vix was almost 75 cents

lower and the volatility index basically never recovered, dipping down to 14 and change. again, we have a moment where the inverse correlation between the vix and the stock market was broken, it broke right here intraday. it is not pointing toward any sort of panic. sebastien says that while the s&p could go higher or lower tomorrow, the action is it won't have much of an extended sell-off. in fact, he thinks the relative weakness it's more likely the vix will travel back above 17 hundred than a trip below 1,600. it's the bottom, he says. here's the bottom line. i always tell you that nobody ever made a dime panicking. we have the interpretation of the charts. based on sebastien's view of the vix, this won't be a long, horrible sell-off of the market. it is not a time to be afraid, he says. we can bounce back much sooner than you expect like we did in late june. is sebastien right?

we know this, he has right before times of extreme panic. i think what he says is a long shot. this may be one more time, he's nailed an important bottom. stay with cramer. this man is about to be the millionth customer. would you mind if i go ahead of you? instead we had someone go ahead of him and win fifty thousand dollars. congratulations you are our one millionth customer. nobody likes to miss out. that's why ally treats all their customers the same. whether you're the first or the millionth.

if your bank doesn't think you're special anymore, you need an ally. ally bank. your money needs an ally. could save you fifteen percent or more on car insurance. yep, everybody knows that. well, did you know some owls aren't that wise? don't forget i'm having brunch with meghan tomorrow. who? meghan, my coworker. who? seriously? you've met her like three times. who? (sighs) geico. fifteen minutes could save you...well, you know.

>> before we get to your tweets, we need to catch up with much needed homework. first back on july 29th, a long time ago, we got a call from

zach in california asking about a fresh face in pharmaceuticals. this is a speculative biotech with a novel approach and involves attacking cancer stem cells. onco meds are far from being used on people. the company generated a ton of buzz. i told you to get in on the ipo before it went public on july 17th. it popped 60% on the first day of trading. i said after the ipo, you had to ring the register. it turns out ringing the register was a real good idea, its highs from 31 to 19 and change. these tiny biotechs can be really volatile. i like the pipeline here. one big caveat. if it falls through the ipo price, a lot of people with programmatically dump it. next day sam in hawaii inquired about natural grocers, symbol ngbc. i love the natural food space.

anybody who watched my interview knows that. i wanted to do more home before giving recommendations. the retailer of organic and dietary supplement, 17 stores, western states. eastern those this category is on fire, failure grocers trades at 17 times earnings. i prefer, yes, indeed, wfm whole foods. also on july 29th, bunny in south carolina, asked me for a diagnosis on immunomedics. immu. it has an exciting pipeline in hard to treat diseases like pancreatic cancer and lupus. the tiny stock is already up 75% from here. if i owned it, i would take profits. that's up too much. remember that group is too hot for me right now. last but not least, on july 31st, eli in new york asked about abner pharma, abnr. so i wanted to give the one a check-up as well. abner has drugs on the market in the pipeline for diabetic euro pathic pain.

the stock is up 85% for the year. i'm concerned it's at value and i'd wait for a pullback. i also want clarity in the company's partnership. keep these biotechs coming. you know we love them. the ceos. now, let's add to your tweets, yes, indeed, #chartnado. let's start with a tweet. chart for ackman vs. icahn. oh, please? please, icahn is a natty dresser. i think that says it all, right? it's scientific. is that a fibonacci number i see there? okay, now, we have a tweet. he says the following, i think nike should buy lululemon. it's lululemon. i made fun of it. give them greater retail presence, good luck. they should have done it a few years ago before christine day turned on the jets there. lulu is an animal, i don't want to say nike should buy it.

our next came in cam, what gives with radian? i thought you liked this one, turning sour? >> no, mortgage rates just went up big. the stock is up gigantically. it's called profit taking. up next. we have a tweet, using decny, 8% off the high, hashtag mad tweets, you have horse sense. our next comes attaldandridge, 1945, get ready, the phillies are going down, you are absolutely right. judge scott wapner is a dodger fan. he was telling me how they were doing so great lately. he says they are the hottest team in baseball. other than my hated braves. i hate them. next, we have a tweet. this tweeter says we need a chart a day. it's been fantastic. thanks. i have to tell you, chartnado has been a blast.

i don't know hashtag chartnado, my executive producer gets mad when i don't mention hash tag. stay with cramer.

carly garners is saying nat gas is done going down. the vix bottom today. see you tomorrow. could this man be brooklyn's own bernie madoff? >> people who lived in that neighborhood never conceived that this schlubby-looking guy was going to hurt them. >> narrator: because, unlike madoff, philip barry's no fancy billionaire flaunting the high life in front of his victims. he's one them. >> he was wrapping himself in the mantle of the hardworking work ethic of that neighborhood and using it to lure people in. >> narrator: and he's quietly building what may be the longest-runninnz