deflationary, right? that means we'll pay more for the future earnings for these two biotechs, and then you've got the ideal situation to buy

celgene and gilead, but have the futures down first. speaking of trampolines underneath stocks, during the earnings periods past, i made note of which companies were doing real buy backs. not the ones that allows execs to sell options into, i mean buybacks meaningful every day, that were impactful and buoyed stocks up on ugly days on the market. because again i'm thinking about the down ten, down 15 futures call here. do you know there was one that really did act as if it was just a big firefighter trampoline. one of those nets. you know what it was? it was viacom. viacom. here's a company that doubled its monster buyback from $10 billion to $20 billion when it reported. the stock has not given you a single break to get in. still hasn't. huge buyback is just standing there. if you get a selloff from the rocket's red glare in syria, i say you buy viacom and let that buyback walk you up to where the stock was before it got hammered by the market. of course, that's only if viacom gets hammered at all. sure hasn't happened yet. you've got earnings from the

retailers that i really like and this viacom situation that i think is very, very attractive. and let's take some more. how about humana? it's up 35% for the year. but humana's the clearest winner under the affordable care act and reported one of the biggest beats in the race. humana won't be dinged at all. this is a stock i never recommend, you know why? you haven't had a single pullback regarding that. check that chart. now you might get one. in it, terrific place to go on those down 12 futures. sometimes we've got to put them to work right at the open when we get big down days because they are so powerful they take every stock low. including ones that shouldn't go because, remember, these have no impact on the oil futures. that means you can be in there buying eog resources and pioneer natural resources, the hottest stocks in oil right now. they are actually getting hurt yesterday even as oil was flying. such is the lunacy of the stock market, people sell some baskets containing these two stocks

causing them to go as the net worth is going up. huge! i find this kind of insanity to be the stuff of totally great trading. be ready. how many people remembered to reach for b & g foods that keeps posting better and better earnings after making additive acquisitions in a stock that very rare lly gives you a price break? now you have one, down almost 10% with 4% yield. it's precisely what you'd have to be bidding for when the missile fly. the only consumer package goods play that should be bought at these levels. remember that starbucks quarter? it was the best one they ever reported with fabulous growth everywhere, especially china and the united states. i know 5% pullback isn't that much. but you aren't going to get a huge downdraft in the stock given how well the company's doing. it's numbers are just too great. i urge you to buy starbucks on any weakness. now that we're getting some. i can't say, hey, i'm waiting for a lot more weakness. i keep thinking about this quarter. remember when earl simon was here last week. not much opportunity there if you're waiting for a pullback, which i said you should do. the quarter was fabulous. but i'm going to marry the hain thesis to the whole foods story. and say at $51,

you have an amazing opportunity to buy the high gross supermarket chain at a big discount to where it was when it reported a fine quarter. makes a ton of sense considering that hain has just given you an update on its business and its business goes hand in hand with whole foods. finally, time to circle back to boeing. here's a company with a 20-year outlook, reported a dynamite quarter, gave you zero chance to get any discount, and it's never safe to say the dreamliner's problems are behind it, we do know one of the chief spurs of dreamliner orders came from what? higher jet fuel. that's right. higher jet fuel, and given the trajectory of oil off of syria, you can't get a dreamliner until 2019. look, i wish i had more to give you. i mean, i wish i could tell you go buy linkedin and yelp, they were the two hottest internet companies. they reported amazing quarters. they're barely down, that makes me uncomfortable. i have no traditional tech names at all i feel strongly about. i can't count on any bank stock yet because there's too much turmoil in washington. many of the consumer packaged goods stocks only yielded 3% and change.

got more on them later. too early, utilities, no thank you. housing gone from amazing to plain bad. again, adding up so quickly we have to wait until the fourth quarter to see if people don't mind the new interest rate sticker shock. i don't have a lot of stocks that are down enough. and i'm not call a bottom. here is the bottom line. the circle back will be in effect tomorrow. look for companies that reported terrific quarters recently and be ready to start nibbling when the smoke clears, that way you'll have the conviction to buy more if it turns out the situation is worse than first thought. am i doing this for my charitable trust? today when the market was down, we committed some, some of the trust's cash. but only in stocks that had fallen so hard that the purchases helped our cost basis or what we paid for the sell-off. that's my way, my discipline. we left plenty of room for more. plenty of room. if things go awry, and we know in the middle east that very few thing frs go as planned that is if there's a plan at all, we've got the cash to put to work as stock goes even lower. joseph in wisconsin. joseph? >> caller: jim, boo-yah from

osh-kosh. >> orb-kosh begosh. >> caller: i have a question for you. thank you for all you do for me. i was listening to you yesterday talk about bristol-myers in terms of turmoil, global uncertainty, it's a pretty okay thing to do for the bio industry, but what about smaller biotechs or drug companies like -- sorry, i can't pronounce the names like srpt, pcyc, acadia pharmaceuticals. is that okay to keep your money in the smaller companies? >> okay. the answer to that is it's case by case. but we are big believers that in this kind of deflationary environment, which is what we may be getting again because rates went up so much, that's good for the smaller biotechs. and we know that the biotechs are still in bull market mode because we've got two leaders. in celgene and gilead. and they're saying, hey, listen, it's still okay to buy. i sanction buying biotech stocks, many have worked out. there'll come a moment when we inflation's raging and we won't be able to recommend them. we're not at that moment yet.

mike in louisiana, mike? >> caller: yes, sir. thank you for taking my call, mr. cramer. >> no problem. >> caller: and what i'm interested in is agio. when i first bought it, it was doing real well. it was climbing a ladder, but it made an aboutface on me. should i sell? >> that had good bankers. i'm surprised that stock has come down so much. i thought that was a very good speculative situation. i actually don't want you to sell. i think that, you know, therapeutic cancer metabolism stories, we've liked those. no. but as long as you regard it as a spec. it is not a regular investment, it is a spectacular spec and i do not want to sell it at 23. let's go frank in florida. please, frank. >> caller: hi, jim, big boo-yah from frank in top of the world communities in ocala, florida. a few weeks ago i asked you about my wisdom for buying southwest airlines. now i've noticed all the airlines have taken a dip. should i go ahead and sell, buy,

or hold? >> well, i think the airline business is being -- look, the sudden rise in jet fuel prices was not anything that a lot of people foresaw. i think the stock can rally. and when it rallies, i think you have to sell it. why? because the u.s. airways/amr deal is not going to go through. and that's the game changer i was counting on for the next leg-up in the airlines. it's not going to happen. as it goes up, i need you to trip. once again we come full circle. circle back, circle back to the stocks with outstanding quarters. when things look more clear, these are the thing us should nibble at. i wish i had more. coming up -- home alone? the housing market helped drive stocks higher for most of the year, but as rates shot up, the open house closed. is the home sale horizon really that dire? or could this market still build? cramer's exclusive with realogy ceo. and later, red rising? is this pullback opportunity knocking or in the beginning of a deep, devastating decline?

tonight a special check of the technicals. kramer's zeroing in on signals that could be telegraphing its next move. as he goes off the charts. don't miss a second of "mad money." follow @cramer. or give us a call. 1-800-743 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. diarrhea, gas, bloating? constipation, yes! one phillips' colon health probiotic cap each day helps defend against these digestive issues... with three strains of good bacteria. [ phillips' lady ] live the regular life. phillips'.

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housing? in the wake of the massive run in interest rates, be it off a low basis, all the housing related stocks have been viciously hammered. worried the increase in mortgage rates will scare people away from housing, put a big crimp in the volume of home sales. but have these stocks been punished enough? take rlgy, chain of 700 company owned brokerage offices, more than 13,500 franchises.

operates a number of different brands. you know them all, better homes and gardens, real estate, sotheby's, this is a pure play on buying and selling homes and the company's so darn big that last year it was involved in 26% of all u.s. existing home sales. that at least involved the broker. if you want a proxy for housing transactions, realogy is it. the company reported a little more than a month ago. at the end of july. despite the climbing interest rates in may and june, the results were spectacular, 22 cent earnings beat off a 23% basis. transactions volumes up 21% year-over-year. management guided for 17% to 19% growth transactions for the next quarter. realty stock has been crushed since it peaked around 55 in mid may. as the conventional wisdom says, the residential real estate business has to slow. dramatically in the reaction to rise in mortgage rates, which means the estimates are too high for realogy. on the other hand, though. the stock dropped from the high, 13 points, 23% decline. these levels is trading 15.5 times next year's earnings, plus

a growth rate that seems cheap. with the latest declines, realogy is given you a 13% gain since they got behind at the end of november. has the stock been overly punished? smith, the chairman and ceo of realogy holdings, someone been through many cycles, three whole housing cycles. get a sense of where the business is headed in this new environment. mr. smith, welcome back to "mad money." thank you, sir. >> thank you. >> you've been through three of them. where are we? because there's a lot of people who feel that if the fed tapers, then we're going to have a -- it's a one-two blow, it'll be too much for this cycle. >> this is an extraordinary correction. we're coming out of a seven-year downturn, it's going to act different than any other recovery. so you've got enormous pent-up demand. you have by any definition extremely low mortgage rates, even with a hundred base sis point increase over the past couple of weeks, it's still by any standard very cheap money. >> how about the home sales which showed a decline today? >> well, i wouldn't worry about a month not in a recovery that's going to take several years.

think about in this context, the builders report about a 13% decline, the existing home market reported a 1% decline. so a month is not something to be concerned about. but that does indicate a sensitivity to rates. >> right. see, what i'm concerned about is the process of getting a mortgage. you have to lock in on an existing home, a lock in new home. you said yourself they're very different. the banks, they're backed up. suddenly you get a situation where you might have thought you were going to get 3 3/8 and you're getting 4 3/4. what do you tell those people as the broker? >> it's fantastic news when it comes to lending environment and rates. >> okay. >> think about it from this perspective. we have in our tool kit the ability to forecast opens and for a 90-day period. we can tell you whether or not there's a sensitivity to mortgage rates and it's impacting the consumers willing to close that transaction. our cancellation rates are at historic lows. there's a reason for that. i can lock a rate with a lender

for 60 to 90 days at almost no cost. i can't do that with a builder. for the builder i'm looking for a six, seven, eight, nine-month period. i may express some hesitancy there. that's something that both the builders -- >> it's a little bifurcated. >> the really good news about lending today is that recent decisions on dodd/frank which you're probably aware of, that is a substantial limiting factor as to the availability of credit. so, listen, we say all the time that under the circumstances that we're seeing any kind of improvement is amazing given the difficulty in the lending environment. >> what is the -- last time you gave us the average fico was so high. >> it's still high. it's a hundred base sis points higher. there's a reason for that. under the new rules that are being circulated for public comment under dodd/frank, which would eliminate the 20% down payment requirement for the bank's retention rule, that's terrific news for lending. that is truly going to have an impact on the availability of credit which we think will also impact the ability of the first-time buyer to truly enter

the market. >> do you think there's some areas based on case-shiller and some of the data you have that is probably more current that have gotten too high? >> no, i don't think it's -- i think we're a far cry from fair value. i mean, remember, 34% peak to trough, we've got a ways to go now. here's what's nice about housing. house's we're reverting to the norm. so what's relevant now is relevant in that local market. so in some markets where you've seen a big run-up in price, florida's an example, las vegas is an example, you may be close to fair value. but every other market in the country's going to act differently. it's going to depend on the local market dynamics, not the national scene. >> i know realogy's view is the hedge funds that bought up a lot of homes is still minuscule versus the entire. but they did buy a lot of hot areas. are they going to get burned? >> it depends on the model. remember the context, they've acquired about 60,000 homes and

they have the capacity to acquire another 60,000 homes on 5 million units in a given area. that's a de minimis impact. they were buying a lot of inventory, they had a favorable impact on local property values. >> okay. there's some talk in the way that your quarter went that the commission -- that some people just were -- they had too many bountiful commissions. i have a lot of friends in real estate and they're never going to tell me it's too bountiful because they have to share with you. where is that -- how does that change? if you wanted to, you could ratchet down the commissions, i don't think that would really help. because then ute get people not working that hard. how does that change -- how does the balance of power work between the top brokers and your company? >> well, the top brokers produce the bulk of the business. at some point, there's so much business that the second, third and fourth-core tiles start participating, as well. they're on a different commission split basis. this is like any other business. the top producers, the people you pay the most, are the people producing the business. when it becomes so voluminous that anybody can participate,

then you see the economics change dramatically. >> we're not there yet. >> we're not there yet. >> i look at zillow all the time and truvia. i don't know whether you think these are accurate or not. but some houses have started coming down. is that a natural reflection of the rising interest rates? >> yeah, i don't think pricing's reacting to interest rates. pricing's reacting to demand. you literally have demand outstripping supply. we still have inadequate inventory. i don't think price is reacting a hundred base sis point movement in mortgage rates. >> at what level? is it 5.5%? look, all we do all day here on -- there's tremendous predominance of talk that the fed is going to stop buying bonds and maybe rates go up dramatically. there's got to be some level where people say, you know what, i'm going to wait until they come down. >> in theory, a rising rate environment is reflective of an improving economy.

in my view, it's what the market will bear. at the peak, rates were about 6.5%, i think we've got a long ways to go before it's a major problem for housing. >> right. do you think -- i'm trying to get the right metaphor for the time. in '09 bob toll was afraid that the light at the end of the tunnel could be an oncoming train. are we now to a point where what we could be maybe get a little bit of a pause and then have a giant long runway? because you were talking about early innings, or is this about as good as it's going to get? >> it's a seasonal business. most of us have forgotten the seasonality in the business. we're going into the downturn in the fourth quarter. the first quarter is never a good quarter for housing, the second and third quarter represents the bulk. we will be the best judge of that about the end of the first quarter next year. the national association of realtors has not taken its eye off the forecast for the year. so the unit forecast stays intact. >> and yours, too, you're totally on board? >> guidance 17% 19% sales volume

third quarter, no problem there at all. so we're -- listen, the long-term metrics are very favorable for the early stage housing recovery and that's where we think we are. >> excellent. okay. that's richard smith, the chairman and ceo of realogy holdings. 26% of the brokerage market. pretty big. stay with cramer. coming up, fed rising? is this pullback opportunity knocking? or the beginning of a deep, devastating decline? tonight, it's a special check of the technicals, cramer's zeroing in on signals that could be telegraphing its next move when he goes "off the charts." stay connected to cramer on mad money.cnbc.com.

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i'm carrie brownstein and i get to be whoever i want. this is what membership is. this is what membership does. after yesterday's brutal syria-fueled decline, i'm calling a special wednesday chartnado edition of "off the charts." to help get our heads around the sell-off. is it over? does today's rally mark some kind of bottom where the selling stops? or will there be more pain ahead like i suggested last night? this is a market where the unemotional discipline of the charts has been surprisingly accurate. in order to help answer these questions about the selloff, we turn to carolyn boroden, a brilliant technician who happens to be my colleague. when she looks at that time charts for the s&p 500 she thinks that the benchmark could soon make an intermediate turn low.

daily chart of the s&p 500, ever since the s&p started falling back on august 2nd, boroden has been monitoring the size of this decline in term of the number of.sit crushes and the length of decline in terms of how long it takes. now remember boroden's methodology psych ofl numbers discovered by the mathematician that repeat over and over again in nature. including some in stock charts as well. on the price side of things, if the rally in the s&p is going to resume any time soon, then the index needs to hold above the low it made on june 24th, and that's 1,560. now, as it happens she sees not one but two forces to support propping up the s&p between where it is now and that potentially lethal 1560 level. first, there's a nice floor based on her math that comes in between 1560 and 1621 not that far below where we're running

now. there's a second floor between 1,578 and 1,582 and both could mark the level where the s&p 500 bottoms. if you're only looking at price at the y axis of this chart, you might be missing something huge. because for her at this moment, it's time! it's time the x axis that is really important. see boroden believes we could see a bounce and possibly even an end to this recent decline somewhere between now and labor day weekend. and that would be huge if that happens. how does boroden reach that conclusion? she's looking for the timing cycles. measures the length of prior swings in the s&p and extrapolate forward to find dates it seems likely the market could change the trajectory. this chart goes back more than two years. and in it, we see a host of declines with the s&p 500 decline drop somewhere between 20 and 23 days, 23, see that? before the decline ran its course and the rally resumed. so far, this current selloff has lasted for 18 days. so, if it is anything like the most recent 22-day decline in

may and june or the low 20-day declines in 2011, this pullback we're mired in could be done in two to five trading days. and that's looking at 100% retracing of these past declines. boroden takes these and puts them through the lenses of the ratios. 38.6, 61.2 and 100%. because these key ratios seem to show up when securities change their trajectory. and what she finds is there are timing cycles which are do you, any of which could mark the moment when the s&p takes a turn for the better. her method is to look for timing in these cluster psychs and that's what we have right now. the chartwork suggests that the s&p could stop declining between today and september 4th. we know it'll likely get pounded tomorrow if we get closer and closer to what happens in syria. but she wants to focus on when the pain will stop and looking for a trend reversal in the next week based on her chart work. you know what? and you can see something very similar happening when you look at the chart of the dow jones industrials.

okay. just like with the s&p, it has been 18 trading days since the dow started to decline in the beginning of august. now, when you look at the major past declines in the dow going back to the second half of 2011, what you see is they have lasted for anywhere between 20 days and 28 days. okay? see it? all those? and they're mostly costing clustered around 22 or 23. so if we assume the current selloff in the dow will last for a similar amount of time, we could be looking at a genuine bottom on friday. which would be day 20 or perhaps next wednesday or thursday, which would be trading days 22 or 23. either way, the methods suggest there's a strong chance the dow will be rising and rising consistently again by the end of next week. remember, she's a technician, not taking into account the labor report, the mark-up at the end of the month, she's saying the charts say we're about there. will boroden be right? even if she misses these timing cycles aren't perfect predictors, they've worked for

her in the past as we've seen with our own eyes on "mad money," in pretty amazing fashion. but if the dow and s&p keep falling next week and the week after and totally ignore the timing work, she says you have to consider the whole scenario a bust and be braced for more agony. oh, one more thing from the fibonacci queen. she says if we don't see an immediate bottom over the next week, that means we could be facing a much steeper correction going forward. so unless we bottom, well, i don't know. you might say that's in the alternative and that doesn't matter, but she's saying it is going to bottom. how about a second opinion. in last week's "off the charts," we consulted dan fitzpatrick, also one of my real money.com buddies and warned us that the s&p 500 had entered dangerous territory. his prediction was for pain! and he was dead right. so what does fitz think about that brutal sell-off? take a gander of the s&p, you won't like this.

fitzpatrick points out that yesterday the s&p 500 did something really bad. it completely broke down through its 50-day moving average. a very important short-term measure of the index's trajectory. we are firmly below that key moving average, something every chart follower out there regards as being extremely negative. see, just that little line where people don't follow charts. taking out that line is extremely dangerous. now, the last time the s&p broke down below the 50-day moving average was in june and it led to a really hideous selloff which lasted until the s&p bottomed at 1,560. there's that number again, nearly 80 points below where we are right now. that s&p level is important to fitz because it defines the maximum selling pressure in the last decline. as it happens it is also at around 1,560 right now. but the 200-day moving average is rising which means as time goes on, it will be further and further above that -- of that make or break 1,560 level. good news, because fitzpatrick thinks the 200-day moving

average is the s&p's new floor of support as it rises, the potential downside shrinks. this is going to go up, okay. so you've got kind of a convergence there that will make it so it not just has to go all the way down to here. his view of what will happen, fitz believes the s&p has peaked for the year and it'll be stuck in a trading range until 2014. he thinks the outcome is the index will test the 200-day moving average, probably around there and it'll then form the bottom of a new trading channel with the 50-day moving average forming the top of the trading range. so not apocalyptic, that means we could fall another 4.5% or so before the pain ends. i don't know, i think that seems pretty realistic to me. here's the bottom line. what can we take away from the two technicians for our emergency post pullback off the chartnado technical? carolyn boroden think thats the decline in the s&p could be likely ending in the next week. dan fitzpatrick sees less to be hopeful for. he thinks it could fall another

4.5% before the current decline comes to an end. to me, all this says keep your eyes peeled for potential bottom, pick up the individual stocks at the top of the show. don't get aggressive. never forget that we could go down the 4% that fitzpatrick says we're certainly headed to. dan in florida, dan? >> caller: yes, sir, king james. >> yo yo. >> caller: how is -- what's your thoughts on agnc, buy, hold or sell? >> no, i tell you, these things are so hard -- they're really creatures of the taper. they could really get hurt. i've been right to steer clear and i'm not changing my view and i know @jimcramer on twitter i get attacked, but it's been right to stick by them. i'm not backing down. frank in florida, please, frank? >> caller: hello, jim, this is english frank in naples, florida. >> excellent. >> caller: i'm calling about, i know central africa very well and there's a fine outfit which is called rand gold resources which is one of the top -- maybe

the best gold miner in the area. american analysts don't seem to know much about it but you've got chinese and you've got middle eastern wealth -- sovereign wealth funds which is sniffing around. and i wonder what you thought about it. >> this is mark bristo, we've had him on, he's a great ceo. i don't like the gold stocks and it's been -- i like gold. if you have to own a gold stock right now, he's delivered the best of the other companies. he's done better than that, gg, he's done better than that. agnico, done better than that. the problem is, the gold stocks have not been as good as the precious metal and i like the precious metal. can i go to jason in louisiana, please, jason? >> caller: jim, big boo-yah, got a quick question for you, buddy. i've made 20% this year due to all your information, and i'm kind of scared about the pullback. i'm wondering if i should sell everything i have, wait for a

pullback and invest back in to make major money. >> thank you for asking this question because it is on my mind won't be able to get back in. that said, i'm trimming stocks i don't think are great. the charitable trust are trimming stocks. i don't own any physical stocks. i think you should trim the stocks you feel aren't that great anymore because they've appreciated or because this isn't that good. and i would do that tomorrow. in today's break glass in case of emergency off the charts chartnado #divergence, let's say we've got one fibonacci queen says it's almost over and fitzpatrick says lookout below. stay with cramer. still ahead -- is your portfolio prepared for a pullback? call, tweet or e-mail cramer to get a check-up. "am i diversified" is just ahead. [ kitt ] you know what's impressive?

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it is time -- it is time for the "lightning round" on lightning round. josh in new york, josh? >> caller: hey, jim, how's it going? boo-yah. >> boo-yah. >> caller: i have a question about the most wildly successful stock i bought in a while, questcor, qcor? do you think it's looking up in the future and going to keep skyrocketing like it is today? >> this is a stock that got slammed by the shorts. they drove it down to the 20s, tested my patience with it, tested my mettle. my mettle failed. i got this wrong, it came all the way back, i should have never wavered, it's had a big run, it's not up to me anymore. i called this one wrong. and i put a light to the fact that i got it wrong because i wavered when i should have been

telling you to buy. richard in ohio, richard? >> caller: jim. >> yeah. >> caller: rich from ohio. >> how are you? >> caller: scco. >> okay. on the dismal joy global call today sutherland ceo was i think a little too bullish when he was here last did talk about how copper is good, but i don't think copper's that good and i don't want to own that stock. edward in california, edward? >> caller: yes, hello, righteous boo-yah from the coachella valley, jim. >> man, i like that. >> caller: i want to say thanks for all you do. and i'm wondering with all the building of the solar plants in the southwest, what do you think about sunpower? >> that is captive to how first solar works, and first solar has been horrendous. just horrendous. if i wanted to own a solar stock, i would own first solar. which i actually think is cheap now. it's going to real some day. let's go to richard in new york, richard? >> caller: hi, jim. >> hi, richard. >> caller: this is richard from long island. >> excellent.

>> caller: warren buffett just came out with a public statement claiming to buy general motors. >> right. >> caller: what do you think about that statement? >> gm is very inexpensive. i believe there's a turn in europe and in china, and i think gm should be bought and warren buffett is right. i would like to know if warren buffett is dumping ibm, that's a big rumor today. let's go to sam in minnesota. sam? >> caller: hey, jim, boo-yah from minneapolis. >> oh, nice, what's going on there, adrian peterson, what's happening? >> caller: not too much. my question's about take two interactive, ticker symbol ttwo. it recently beat earnings estimates but forecasted -- >> it's been -- it's finally got it right. it's got the gaming cycle going for it. it's got great momentum. i'm going to say it's a momentum stock. i don't want to comment further than that. steve in pennsylvania, steve? >> caller: big boo-yah, buddy from the 'burgh.

>> how you doing? >> caller: good. how you doing? i'm looking at a crude by rail, tbf energy. >> no, it's refiner play. let the yield get to seven before i'm going to push that stock. i've got to tell you, that's been a dog and i don't like that group and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade.

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look, it's been tough. the market is skittish. we're all skittish as we worry about events overseas and at home, we've got washington, we've got the situation in syria. regardless of everything happening at "mad money," we work to protect portfolios no matter what the market may throw your way. it's called diversification. it happens to be my favorite game. call or tweet me @jimcramer, tell me your top five holdings and i tell you if your portfolio is diverse enough or if you need to mix it up a little to keep

yourself diversified. let's start with a tweet. i'm watching netflix, the futures, my twitter stream and reading a book, am i diversified? let me see, twitter is internet, netflix is internet, the futures are financial, reading is -- let's call that amazon. that's three -- no, you've got to mix that up a little. how about like meeting someone and maybe like go to the movies? [ buzzer ] there, okay. get diversified. i mean, have a date. all right. yeah. i mean, focus. kristin in florida. kristin? >> caller: hi, jim, how are you doing? >> all right. how are you? >> caller: good. i've got facebook, aig, corning glw, royal bank of scotland. and sonovus. >> got it. let's go to work. aig is financial.

it's largely insurance company. owned by a charitable trust. sonovus, that's two of a kind. aig, three of a kind. corning is a technology company that does glass work and facebook is internet. we're going to keep aig, royal bank we'll get rid of, get a health care company, i'm going to integrate bristol-myers right there and then let's do a diversified industrial -- oh, what am i in the mood for here? i want to do lockheed martin. i feel it's right. good example of what should be in there. let's go to jason in washington, d.c. i want lockheed martin ceo. he's doing such a great job. jason in washington, jason? >> caller: jim, boo-yah. >> boo-yah back. >> caller: thank you for all your service, everything you've done for us everyday investors and financial planners of guys like myself. >> well, thank you, i want everybody to be a better client, better adviser. that's my game. what's up? >> caller: yes, sir, yes, sir. every day. i have onco meds, medical

pharmaceutical, bank of america, medical property trust, channeladvisor and google. >> okay. whoa, well, real estate investment trust is not going to be the same as onco med which is a spec. we know that bank of america is financial. channeladvisor and google, they're actually one in a same. they're both internet plays. google's got a big advertising arm, we're going to sellchanneladvisor, bing, bing, bing and let's put in b & g foods. that would be perfect. that portfolio needs yield. "mad money's" back after the break. i'd like to know, are you long america? >> we at ford in the united states are competing with the best countries in the world. >> look at the global competitiveness of american companies by any measure.

>> my life story can be your life story. you can start with nothing in america and create the american dream.

we saw a really telling divergence today. one that's just begging to be noticed because it's speaking louder than anything else i'm watching. i'm talking about the nonstop selloff in the consumer packaged good plays versus many other

portions of the stock market. think about it. neither proctor & gamble or colgate were able to rally. hershey, general mills. what does that say? what does that scream? i think that interest rates aren't done going higher. today's climb back up is for real. remember, these stocks are part of that bond market equivalent trade and they failed to rally when rates dipped back down the other day telling me that the recent decline in rates was not for real and that we will soon see the ten-year sporting a 3% yield. that's about a quarter of a point above where it is right now. of course, there could be other forces at work here. principal cost for these companies is oil. which went up again today. products have to be shipped to the merchants, they use packaging that requires plastic that requires energy to be made. plus, these companies often sell into the emerging markets where the growth is for them and you notice, have you noticed, thor merging market are getting crushed here. maybe the purchasing power in the emerging markets are getting crushed too. i think it comes down to interest rates. these packaged goods stocks were terrific f so long. even the worst ones, the ones

with the least growth flying higher. i know i talked about how angry i was that my charitable trust sold these on the way up rather than holding on as they kept going higher. i thought the valuations were ridiculously stretched. at the top they were vuld much more richly than biotech stocks. despite the fact they only have 3% organic growth or less. now they're coming back to earth. and from the looks of it, they had further to fall. 4% is the new 3%, 4% yield breaks the fall the way the 3% yield used to. what should you do if you own these stocks? and i'm sure you do. first you've got to recognize that it might be years before you actually see those 52-week highs again. that's because at their height, these weren't just fixed income plays. pretty clear from the action and all the taper talk that we aren't going to see those low rates any time soon. while the companies have terrific consistent earnings, if the economy takes off, the stocks will do nothing, nothing at all. most of the companies are too big to be taken over. so forget about that. fourth, your best hope is that management decides to break the businesses up and their yield sell at a hefty premium to the ten-year.

that could take time. finally, fifth, perhaps if the fed tapers, slowing the economy, particularly housing, people believe we're going to slip back into recession, then the consistent earnings streams, the consumer packaged goods names will make them more attractive. but i think that still won't move the stocks up much at all. it will make them relative outperformers as the rest of the market gets whacked. they have become sales and you can and always do get lifts with these stocks. ironically it was right about here that my charitable trust started taking profits from these companies. maybe i'll be wrong again, but with the prop of lower rates, i think the group's dead money. at best, they cannot do it without that prop and that's no place you want to be. when we made our commitment to the gulf, bp had two big goals: help the gulf recover and learn from what happened

so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger.  you're not made of money, so don't overpay for boat insurance. geico, see how much you could save. time to have new experiences with a familiar keyboard.

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so we could be a better, safer energy company. i can tell you - safety is at the heart of everything we do. we've added cutting-edge technology, like a new deepwater well cap and a state-of-the-art monitoring center, where experts watch over all drilling activity twenty-four-seven. and we're sharing what we've learned, so we can all produce energy more safely. our commitment has never been stronger. all right. so let's understand each other. i don't think that we're done going down. but i also now want to put the shopping list together. you circle back to the best names. give you a classic example. when you take a tjx, they do well when the rest of retail does poorly. you take a boeing. they do well when oil prices go higher. you're acting on the current scenario to pick stocks you already know did well because you just listened to their conference calls. we obviously -- if we just got the fed to say we are not going to taper until we're done with

this nonsense, then we go back up and that's why you have to start picking at things into the weakness. i'm jim cramer. i'll see you tomorrow. >> in the christmas retailers have been dreaming about, shoppers start spending again to put some cheer back into a holiday season that's unfolding at the end of an economic crisis. in reality, with their savings diminished, their jobs on the line, any big spenders here are more likely to be demanding deep discounts, and some won't be buying anything at all, because