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, trying to save you a little money. my job is not just to entertain but to explain. to coach, to teach, call me 1-800-743-cnbc, or tweet me @jimcramer. please be gentle and kind. hey, somebody stop the presses! stop it! why? because value, value actually

matters. yeah. value of all things, it's playing a role. i mean a long-term value. and it's springing up everywhere, unlike the real spring which is nowhere to be found. that's why the dow climbed 91 points. and the nasdaq, which last i looked doesn't add a lot of value. therefore, advanced only .19%. >> look, i know it sounds like i'm being facetious here. doesn't the stock market always care about value? honest, simple answer is no. plenty of times the predominant investors, the ones that matter because they move stocks only care about growth stocks. at those moments, value gets ignored because value doesn't move unless management does something drastic like a breakup, spinoff. growth rolls higher as the managers keep reaching and reaching, paying ever higher prices. that's the kind of market we've had for a very long time. but over the last week, there's

been a remarkable transformation. the aggressive buyers are now the ones seeking value if the economy gets better, right? and they're taking no prisoners as they bid up the newfound favorite stocks as if they're growth stocks. why don't we go over a couple of these value names so you can see what i mean. first, there's caterpillar, one of the best-behaving stocks in the entire market, up for 2014. now caterpillar's been a chronic underperformer! for several years. mostly because it's consistently missed earnings estimates and you've got to slash them. in the meantime, the stock market as a whole has marched higher and become very expensive relative to caterpillar, the big earth mover and engine company. right now, c.a.t.'s trading at about 14 times heavily reduced earnings estimates.

come on, man, that's much cheaper than the s&p 500 trading 17.2 times earnings even though it's a high-quality company. until recently, though, that disparity meant nothing. who cares about value if you can buy a stock like twitter that keeps roaring higher. why bother with value when chipotle's steaming ahead nightly. but now those admittedly expensive stocks and their cohorts are going down. and the growth oriented buyers, they're reaching for red hot ipos but not paying up for anything. if anything, they're -- >> sell, sell, sell -- >> which is why we have to recognize not just things go wrong with caterpillar, but there are also things that can go right. >> house of pleasure. >> consider these positives. first, we have united rentals on the show not too long ago. we know from the cceo of united rentals there's a renaissance in optimism about commercial construction. hey, that's c.a.t.'s bread and butter. when he came on not that long ago, i don't think he could have been more optimistic about his business and i questioned him several times. second, got to consider the fed's comments from last week. didn't the fed tell us that business is getting better? and that means what? it means there's going to be a need for more nonresidential construction. again, right in caterpillar's

wheel house. third, we've been hearing a lot of calls about how coal has bottomed out. something as you recall, michael ward told us right here on the show. now, look at the action in joy global. that's the biggest stand alone coal mining equipment maker. it rallied 3% today. we know caterpillar is joy's largest competitor. means big numbers for c.a.t. fourth and finally, all over the street today, we heard about a revival in trucking for the first time in ages. several firms upgraded truck makers. caterpillar makes the kind of edges that clearly benefit from any kind of rebound in the kind of businesses that require more trucking. so the stock runs with the idea that even if c.a.t. screws it up, how much more can it fall? after all, reported a hideous number last time. and it didn't go down. lots of people are short it. what if it reports a good quarter? the stock would rocket much higher than it is now. want another example? how about this one? johnson & johnson.

hey, that's my favorite large cap pharmaceutical name. the company with the highest growth rate of all the major pharmaceuticals, yet it has done nothing, nada at all since it reported a good quarter but gave lukewarm guidance. since then, j & j has languished in the wilderness. it's actually trading at a discount to the average stock on the s&p 500. remember, that's how we grade stocks, okay. value buyers know that disparity can't last, this is the fastest growing drug company with the balance sheet bigger than any company in the united states. and the best management in ceo who has talked openly about shaking the company up so it only has top tier divisions, get rid of the draws. yet it trades at a discount to the rest of the market? that's preposterous. but as the money has poured out of the speculative biotechs in the last few days, it's flowed back to j & j. now there's ibm, despite a lot of heat saying cramer, you hated ibm yesterday. no, i didn't. i praised it yesterday. the stock's ramping like i haven't seen in years. this isn't a penny stock.

isn't plug power, guys. anyway, it's done without a single whisper of analyst love. same as caterpillar, got too darn cheap. yes, ibm missed the last quarter. missed the quarter before that. but this is a value play that is rapidly transitioning to the cloud. it's true. it's much more of a software than a hardware play now. yet it sells for only ten times earnings. not ten times revenues. ten times earnings. ten times earnings with a new mainframe cycle coming, ood ls of cash flow, warren be buffett is the biggest backer, the value guys are saying, who cares, come on, it's too cheap. how about microsoft? hit a 52-week high today. it's going to spell out new strategy on thursday. i've been working on this one. i think the company's new ceo will usher in a new era where everything is on the table.

a lot of cloud love at microsoft. that could take microsoft trading at 14 times earnings not sales and yielding almost 3% still higher. why own a cloud company that's losing money when you can buy one that's making money even if it's growing slower? by the way, this is the same logic that quality produces in apple. it's another stock selling at 12 times earnings, although it's a slower growth rate, and yes, a much more frustrated shareholder base. consider schlumberger. this is the finest oil service in the world with the exception of core labs. this company has fantastic technology, great mines running it. i've seen the stock trade at a premium to the s&p for literally all of my trading life. but of late, because of some tepid guidance, it slipped to a discount. that ended today when the company spoke at the howard wheel conference i told you about, gave a tremendous outlook showing we are in a golden age for drilling. oh, boy they used the fabled strong year-over-year growth line that really gets stocks

going. hence why schlumberger roared all day from the get go. finally, here's a totally wild one. you know what hit my value screen today? are you ready skee-daddy? celgene. could go lower, don't hold me to that. it bounced. it is down a staggering 32 points, pretty much in a straight line from the high before rebounding to close at 144.50. did you know at the levels where it was at one point today celgene is dramatically cheaper on 2016 earnings? and we have estimates. and pfizer or merck? can you imagine? a rapidly growing company like celgene trading at a discount to two slow-growing behemoths? but when stocks get hit as hard as celgene has, you get down to real value. and that's why my charitable trusts had to buy similar today. plenty of reckless ipos, any heightened penny stock, or newly minted software as the service

companies and development stage biotechs that will never develop. but right now, the value managers are stepping up and buying aggressively, although growth managers, they're licking the wounds. the bottom line, this value move may have some real legs. the stocks they're taking up are so much cheaper than the average equity that they could rally for days on end without running into valuation parameters or ceilings. yes, they've now run a bit. only a real scrooge mcduck would think they're too expensive. and i very rarely trot out to scrooge mcduck. >> caller: jim, i've gotten used to the idea of selling stocks before the quarterly report. seems like no matter how good they are, they all get hit. >> boy, does that make sense. >> caller: yeah, best buy got hit last time and i thought i'd let it come down and it came down even more than i expected. i wondered if you thought it would come back in time. >> you know, five below came

back today, william sonoma had a remarkable quarter. best buy, the best thing about it, sir, is that the expectations are so low that i do think they can do the number. will it move it? i don't know. five below the expectations were low and it's up very dramatically after the bell. so maybe there's a shot here. can i go to patrick in arizona? patrick? >> hello, jim. some time ago, i've purchased alcoa and it dropped. i've been holding on to it to see if it recovered. and now it's starting to recover. should i hold or should i sell? >> it's a funny stock. what happens is that it reports and then it gives up something. and then if you notice since it went down, it comes back. i think many of the markets that alcoa trades in are getting better. i would sell some, maybe a quarter position, get ready to buy it back when there are people who are disappointed who shouldn't be. a transference is occurring. it's all now about value, baby. "mad money" will be right back.

coming up, whether or not, tommy hilfiger. will old man winter spoil the shopping this winter season? or will consumers bundle up with its brands? find out tonight when cramer talks to the ceo fresh off earnings. and later, strong pulse? health care legislation was supposed to put many medical stocks in the hospital. but what happened next took wall street investors by surprise. find out which tickers have been moving higher and whether that move could continue. plus, from laggard to leader? find out if a huge market selloff could be about to turn around in a big way. all coming up on "mad money." don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets.

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we know that retail's been pretty darn hit or miss this year with more misses than hits. some of these stocks have been real houses of pain. including long time cramer fave pvh. the stock that's down 14% year-to-date. but as we move into spring, the hideously cold weather that kept shoppers at home should be a thing of the past. and at the same time, the border economy seems to be picking up speed. that should be good news for retailers like pvh, which has historically been a well-run company with one of my bankable ceos from get rich carefully. pvh reported after the close today and beat wall street's earnings estimates off a penny, even as revenues, some could say, came in light, not clear, rising 25% year-over-year to 2.052 billion. although, it's guidance that matters here. and i think the guidance seemed pretty darn positive. let's check in manny, find out more about the quarter where his company's headed. manny, welcome back to "mad

money." good to see you, sir. >> good to see you, jim. >> i've got to tell you, manny, i felt, i don't want to draw too many conclusions. i thought this was possibly the turning quarter. stocks down a lot, i see that now we can start talking about earnings per share power. you mentioned the term significant progress in some of the areas that have been hurting. is that too optimistic? >> no, i think, look, you mentioned about the weather, some other things,s always concerned about the environment. i think as we look to the second half in particular this year a lot of the initiatives that we put in place last year's third and fourth quarter continuing into this year, we see a big turn around in the calvin business in the second half of the year. our order books are very strong both in europe and north america for our jeans business. so we're optimistic. now, obviously, it's got to sell through and we've got to prove that out. first and foremost, get it sold in. we feel good about how we set up

for third and fourth quarter this year. >> i want to go back because jeans have been a problem. this is new. you're telling me jeans are better than they've been. >> i think we are starting to see some light on the jeans business. in north america, initially, we're starting to see some better sell throughs on the men's side. >> okay. >> and our order book really grow in europe and north america for the third and fourth quarter as we set up for the fall and holiday season next year. this coming year. >> southern europe has been a problem, particularly italy. i didn't see anything positive about that part, about italy. >> well, i think what we're seeing are european business overall, we're seeing has stabilized. >> okay. >> and as we're looking out, our tommy hilfiger business which is the much bigger part of our european business, our order book will be up about 5% for holiday, fall and holiday as we go into 2014. so that's a significant turn. our spring book was up about 1%. >> right. >> so we're feeling pretty positive about how that is shaping up.

>> okay. i liked what you had to say about asia and brazil. how big are they really? >> well, our calvin asia business is up $500 million business. operating margins in that business are in the high teens. >> that's pretty good. >> it is a very strong business. it's been strong in 2013. and we don't see any reason why it would slow down in 2014. so that business is comping right now in the low single digits. but i think as we get into a little warmer weather, we should even see some better results. >> okay. that's good. that makes me feel you're not overpromising. not that you haven't, but i know you yourself were abject about the miss, the initial miss, but you said you'd fix it. what's crucial for me, the numbers are difficult to understand. there's a backout, there's a bass. you got rid of bass. there's currency backout. to me, when i interpret, i could actually say if you added that back, you could get to 675 -- i mean, sorry, 765, 795.

that would exceed what i find the consensus to be. is that a fair judgment? >> you've run your own numbers. when i look at it, i think fundamentally what really is going on is we're continuing with the acquisition in the first half of the year to make some significant investments in the business. >> right. >> while at the same time feeling that we're starting to see the light in the second half of the year based on our order book for calvin, which is up double digits off a relatively small base in europe, but starting to see positive momentum there in jeans, underwear and the initial launch of our sportswear businesses there. that's the business where we talk about $500 million business in europe for calvin that is at best a break even business for 2013 where our tommy business, which is three times the size is operating at 17% operating margin. so the huge opportunity there to start to see some turn around in that business, i think it's going to be second half weighted. and i think the improvement we're really looking for is second half weighted for our calvin business.

>> okay. now, we have seen a little bit warmer period during this last four weeks. >> everybody wants to see -- >> i know, i know. >> we are seeing -- both the combination of the colder spring and the later easter, which is three weeks later this year, i think we're really -- we really need to see a little bit more of the season. there's no getting around the fact that the spring north america business has been soft relative to where everyone is. i can't come here and, you know, give you some positive spin. i think i need to see the april business.

every time the weather warms up, we see a big pop in business. >> okay. >> i think we continue to be optimistic that once the weather breaks, we'll see pent up demand, and we'll see an uptick in business. but right now, as we're working our way through, it continues to be uneven. so the trends we saw in december and january have continued into february and march. >> fair enough. >> it's forcing us to be more conservative in our guidance, particularly in the first quarter. >> but i am getting a sense of optimism from one of your most important customers, which is jc penney, particularly for your izod. that doesn't seem to be weather related. just seems they're getting better. >> yeah. i think the penney's business has improved overall. >> more bullish. >> bullish about how he's positioned. i think he's getting the benefits of a lot of the initiatives he put in place. and i believe that as we work through the year, you'll see a continued step up, improvement in comp stores. we've got some big initiatives with our izod brand and our van heusen brand in that store. so that channel and distribution, that customer

continues to be positive. >> one last question, the street has never been as polarized as i've seen on pvh. i've followed your company for years and years. goldman starting to talk about a ten plus earnings power. morgan stanley telling people to kind of get out. i think it's okay to be thinking out several years that there could be $10 in earnings power here. >> i think so, too. we look out two years, i think there's clearly $10 of earnings power. i think we get through this first half of this year, we're looking at what we feel very comfortable about 15% earnings per share growth as we go forward on a pretty big base. and i think the investments that we're making could accelerate that if we can -- if we can get breakthroughs in our jeans business and particularly our european business. >> stock's a buy. that's great you gave us that information. you're so candid, i really appreciate that. that was manny chirico. this stock is down huge for the year. maybe this is a good opportunity. stay with cramer. [ male announcer ] meet jill.

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use promo code onguard. order now and get this document shredder to keep sensitive documents out of the wrong hands. a $29 value free. ♪ ♪ at the beginning of this year, the last major provision of the affordable care act, aka obamacare went into effect with a number of delays and rollout problems. but the point is obamacare, it's alive. there's been a lot of speculation about the damage this could do to small business. i'm pretty sure it will. but for now, let's just stick to the health care companies that are pretty directly impacted by

the now in effect legislation. going to the obamacare rollout, everybody i talked to was convinced that it would be the hospitals that would be the clear winners. after all, more people with insurance, more people getting treatment, more people can pay for their treatment. well, when it came to the managed care companies, the health maintenance organizations and health insurance companies, the general verdict was a lot less positive. a lot of people thought the companies like aetna united health, cigna would be hurt by obamacare. >> the house of pain. >> and possibly hurt badly. i know many a hedge fund that shorted these seeming whipping boys. what happened? what's really happened? the hmo stocks have been about the best group in the whole market. they're on fire. over the last 12 months, aetna's up 48%, wellpoint 55%, unh 45%. even cigna 30% gain. that's right, despite the endless worries about the

affordable care act, these stocks have surge and business is looking very good. something we got a sense of from wellpoint's bullish analyst meeting last friday, ignited the group again. if you're sitting there scratching your head and thinking, what the heck is the deal with these managed care companies, aren't they the enemy of obamacare? well, i don't blame you. that's why tonight, i want to explain this move. tell you why the upside is far from over and let you understand how the market really works, which is what i'm trying to do. i'm trying to teach here. long story short. many investors were worried about multiple head winds from the implementation of obamacare. and the managed care group has been benefitting. don't forget, despite the hand wringing, these hmos practically helped write the affordable care act. the obama administration wanted

their support for the law and congress bent over backwards to make that happen. at the end of the day, i'm actually not that terribly surprised a law designed, in part, to benefit the health insurance industry is doing just that. people were terrified about what the obamacare rollout would mean for these companies. first, there were concerns over the new medicare advantage reimbursement rules. under the new rules as part of obamacare, the government writes a check to your managed care provider every month, say $100, if you spend less than that, say $90, then your hmo gets to keep the difference. but if you go over that $100 level, the hmo, not the government, has to cover the extra cost. so there were major worries. seemingly on point that managed care companies with big medical advantage exposure could take a big earnings hit this year and in 2015. that was worry number one. second, some investors have been concerned about the insurer fee across medicaid, medicare and commercial insurance.

basically, it's a 2.3% tax on all premiums collected by these companies. this is one of the ways the government's paying for obamacare. and obviously an extra 2.3% tax is not going to make any of the managed care providers particularly happy. third, the big fear, a lot of people have been thinking these companies might take some serious losses on the new exchange. you might have all these new people signing up for insurance on exchanges, people who haven't had doctors previously. plus you have all these people with a pre-existing conditions who are pretty much guaranteed to rack up big doctor bills. but thanks to obamacare, they no longer need to pay enormous premiums. the one provision of this law that pretty much everyone across both parties agree with, that this rule that you can't deny people coverage with pre-existing conditions is in place. now, i don't want to sound heartless here, but there's a reason that the management companies didn't want to insure these people because doing so cost them a lot of money. how is it these stocks are

rallying given those three, actually, really, pretty negative worries there? first of all, the medicare advantage reimbursement. we got word -- this is when the stock started going higher. the reimbursement rates for 2013 would decline, right. we knew they were going to decline. people were expecting 6% to 8%. remember how wall street works. that's better than expected cuts that actually matters. how about that 2.3% tax on premiums? turns out it's manageable. and these companies have been passing the tax on to their customers or make up for it in efficiency improvements. as for the exchanges at wellpoint's investor day last friday, we heard the medical cost of new patients are coming in largely as the company expected. and wellpoint's been able to price their premiums well ahead of these costs so it doesn't look like it's going to be much of a problem for the group. in other words, all the expensive customers with pre-existing conditions are being offset by healthy people who need to sign up for insurance coverage because the

individual mandate. these healthy people are exactly the kind of customers these companies want. on top of all of that, in general, more people with health insurance equals more business for the managed care companies that provide the insurance. and it turns out that the insurance exchanges represent a terrific opportunity for the managed care companies to switch their business customers to plans that carry higher margins. so if obamacare is a boon for the managed care stocks and not a burden, which one should you buy? because, boy, they're all going higher. let's see, we've got united health, aetna and wellpoint, the most diversified of the bunch. unh, united health, best managed. but it is the most expensive selling for 13 times earnings, still relatively cheap. the average stock sells at 17. wellpoint had a big run-up in the analyst day, even though it only sells 11 times earnings. i like what wellpoint had to say. wait for a pullback before you pull the trigger. don't want to chase. the one i would by here is, believe it or not, is aetna. it sells for 10.5 times earnings, even as it should be growing the fastest thanks to

the acquisition of coventry. humana has the biggest exposure, run up 70% in the last year. people realized it wasn't as at risk as they thought. but at this point, the stock has a lot less upside. cigna's been the worst performer, up 30% in 12 months. more of a commercial focus making it less risky. but the latest quarter wasn't so hot. so for me, it's in show me mode. here's the bottom line of the incredible what the heck story despite all the worrying since the affordable care act was passed in 2010, now that the law's in effect, it turns out, it really is good for the managed care companies. my favorites are united health, wellpoint and aetna. aetna, i'm okay with it right here. i know what is counterintuitive. but these really are the big winners from obamacare. instead of the big losers. just an amazing turn from where we thought they'd be, not all that long ago. isn't that incredible? just so much work on this.

i couldn't believe it. eric in my home state of new jersey. eric? >> caller: hey, jim. >> hey, eric. >> caller: my question is about glaxosmithkline. they have great products giving out over 4% dividend. and yesterday they went below their 100-day floating average. >> i saw it, too, and thought, wow, 5.6%. i know they're not setting the world on fire, but i think that's an interesting proposition for a diversified portfolio. nice call. why don't we go to nick in massachusetts. nick? >> caller: big boo-yah from boston, jimmy. >> i'm missing boston, what's up? >> caller: just watch your show, love your show. >> thank you. >> caller: i think you're the biggest brains in the business. >> thanks a lot, man. >> caller: you're welcome. i made a stock purchase 14 years ago with a company. i wonder what you think about

reinvesting in the stock. >> i think what's happening, sir, and thank you for those kind comments is that the market is starting to recognize in this particular antifroth moment we're going through that companies that never make any money are not good ones. i think that's a dicey speculation. you've owned it this long, let's hold it to fruition. maybe it'll be like plug power where management will come out and say great things. it's not one of my faves. i've got a lot making a lot of money. those are the ones i like. sometimes stocks don't act the way you'd expect them. it's critical to understand why. obamacare was expected to hurt the hmos, it's been just the opposite. stay with cramer.

i dunno, i just ah woke up today and i said i need something sportier. annnd done. ok maxwell, just need to ah contact your insurance company with the vin number. oh, i just did it. with my geico app. vin # is up to the loaded. ok well then jerry here will take you through all of the features then. why don't weeeeeeeeeeee go out to the car. ok, i'll just be outside... ok, yeah. his dad is my boss. yeah. vin scanning to add a car.

it is time -- it is time for the "lightning round" on cramer's "mad money."

rapid-fire calls, say the name of the stock, i tell you to buy or sell. play until this sound -- and then the "lightning round" is over. are you ready ske-daddy? time for the "lightning round" on cramer's "mad money." ron in california. ron? >> caller: hey, big boo-yah, jim, central california. >> nice, let's go to work. >> caller: hey, my question is, what's your take on b.a.? >> i think everyone's panicked because b.a. stopped going up. not me. i say boeing, great long-term investment in multiple year plan. don't panic, stay in. let's go to peter in new york. peter? >> caller: good evening, jim. a big new york b-b boo-yah. >> right back. >> caller: i've been a huge fan for years. is i wanted your insight on cvr. is >> i have given up on brazilian stocks. the stock's going up a little, sell, sell, sell it. robert in florida. robert? >> caller: jim, my stock is ayi. i bought it back when you recommended it, it was $40. it's gone up, i've sold half up, i sold another half. now for the last week, 139 to 140.

what do you think? hold or sell it? >> take out another chunk, let the rest run. it is a great company, a lighting company that people don't pay any attention to. except for you and i. it's good. take a little off. no one got hurt taking a profit. let the rest run. >> caller: boo-yah, jim. here's a big boo-yah from my kids! >> boo-yah! >> i'm loving that. >> caller: my stock is cognizant technologies. >> it's good. a good consulting company. i prefer accenture. roger in west virginia, roger? >> caller: hello, mr. cramer. i'd like to ask you about gti. >> graftech. i like it, but it's fine. let's go to john in kentucky. john? >> caller: boo-yah, jim. >> boo-yah, john. >> this is john from kentucky. london, kentucky. >> got it. i've been there, thank you. i've been to versailles, too. >> caller: yeah. nice town.

my stock is dollar general. >> i like dollar general. i know there's one right near you because i've actually been there. i have to tell you, the stock is acting sluggish. i think between 50 and 55 represents good value. and that ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade. >> coming up, have the double digit declines created an opportunity in biotech? cramer finds the answers when he goes off the charts.

oh, boy. right now we are caught in a truly vicious rotation. and even though i've been telling you about this for days, it's worth covering some more. it's by far the most important thing happening in the market at the moment. and seems like very few people understand it. when the economy picks up speed, the big constitutional money managers who dominate the market start moving their capital into the stocks of boom and bust cyclical companies. that could bring spectacular growth during an economic expansion, the industrials. where does that capital come from? simple, at the same time the big boys are selling off the stocks

of consistently fast-growing companies, we call those secular growth stocks because they do pretty, yeah, equally well and good and bad times. that doesn't give you excitement. and that selling is roiling the market, causing high-quality secular growth names to get crushed. and it's through no fault of their own. of course, when the rotation ends, these stocks could bounce back and i think with a vengeance. we don't know when the rotation is going to end. i know this idea of rotation could be tough to get your arms around. we want to believe that individual stocks trade based on the fundamentals of the underlying business. but the truth is, that's only how it works some of the time. the rest of the time, though, moments like this one, the wall street fashion show. and i call it a fashion show for a reason, because groups of stocks can go in and out of fashion just like clothing styles change for the seasons. take biotech. for more than a year, the biotech sector is one of the generals that was leading this market higher. it was a fabulous leader, giant

gains. but over the last month, the biotechs have been taken out back, lined up against the wall and shot in the head. that's not because high-quality biotech companies like celgene, regeneron have gone bad. nothing has changed at the companies. the stocks are out of favor thanks to this rotation. as i said at the top of the show, the hedge funds and high-growth mutual fund playbook says you should sell these guys when the federal reserve says the economy's heating up. so tonight i want to show you what this rotation looks like from another angle. that's right. we're going to go off the charts to see exactly what's happening to the biotechs here. we're going to use the help of bob lang, a brilliant chartist who is the technical star behind the trifecta stock's news letter at the street.com as well as founder and senior strategist at explosiveoptions.net and a guy whose work i analyze in "get rich carefully." take a look at this chart of the ishares, the ibv. this is a terrific chart of tracking the etf of tracking the larger capitalization of biotechs. it's just -- in just the last month, this thing has dropped $34. 12.4%. over the last few days in

particular, the biotech etf has been obliterated. and lang points out the decline happened on heavy volume which indicates major liquidation by big institutions. however, thanks to the recent breakdown, the ibb is now as oversold as it's been in months according to the williams percentage r oscillator we use. that's an indicator developed by larry williams that tells you whether security has become overbought or oversold. and lang says the oversold condition could be leading to what might be a quick rebound. perhaps one that began today with the ibb declining in the middle of the day falling $3 only to rebound and finish up slightly, and maybe that's the beginning of a reversal. with a recent selloff, believes that the biotech etf went down too far below the key 50-day,

and that's the green. and its 100-day moving average and that's the purple. bounce. the thing about a dead cat bounce, though, as i can tell you from personal experience when my own cat was hit by a truck is that in the end, the cat is still dead. or in chart terms, the pattern in the biotech etf is still negative. lang thinks the ibb could rebound up to 250, not that much from here. that's 10 point to 14 point increase before the bounce. if the biotech etf can bounce up to the levels and consolidate and trade sideways for a while, then we can see it's done. then the ibb could be ready for the next move higher. for now, though, lang doesn't think it's very likely as we would require a high rally on strong volume. and he doesn't think that's likely. now check this out. this is what's so hard about charting. look at the ibb weekly chart. now that's -- that's terrific.

see, from lang's perspective, this is a very, very different picture. whereas the daily chart showed the etf going from a terrific uptrend to a horrific downturn. in the longer term weekly chart, that same action to lang looks like just a minor pullback within a larger uptrend. the ibb up 83%. and even though the biotech etf has been hammered, lang thinks the weekly chart suggests the current pullback could be an excellent buying opportunity. again, we're going to the oscillator. the williams percentage r oscillator on this one. the ibb has been overbought territory, what's called embedded overbought because it stays up. lately, though, the oscillator has dropped down out of the overbought territory into the oversold territory. now the last two times that happened this past june, okay, we go there. and then in november of 2012. you caught pullbacks in the ibb that turned out to be fabulous buying opportunities.

and lang thinks it can be possible this can be another terrific entry point. these two different charts may sound like they're painting a totally contradictory picture of the biotech sector. i know i felt it was. i actually think this dichotomy makes some sense. as long as the rotation out of secular growth stocks lasts, the short-term picture for the big biotechs is greater. but eventually the rotation does end. they all do. and when that happens, there's still high-quality companies making real money here. four horsemen in the book, those are fabulous companies. and after long enough time, the currently depressed prices will look like great entry points. doesn't mean they won't go still lower, but if you're an investor, not a trader, but investor, you may want to think about picking at the big biotechs gradually in the weakness. here's the bottom line, the chart as interpreted by bob lang create a picture what's happening. short-term, he thinks the biotechs have been hammered so hard by the rotation, they're

due for a dead cat bounce. not necessarily more than that, but looking at the long-term weekly charts, the current weakness could be a nice buying opportunity within a still intact uptrend. more on that later. i have to say, i'm with lang. as just today, after waiting for a while, my charitable trust, which you can follow bought more celgene. 12 times 2016 earnings. sorry, doesn't make sense. time to buy. stay with cramer.

venture capitalists know this big move up won't last forever with these ipos, they know that you have to strike while the iron is hot, hence the initial public offering for box, the cloud based storage company that was announced today and the pending ipo for dropbox, hence the grubhub deal next week, hence all the cloud deals last week with the appendage that juices the stocks and makes all the ipos red hot. they are pumping out these deals left and right because the appetite from hedge funds and the public is insanely voracious. these are exciting developments, particularly for the companies that tell you about the total addressable market and how they aren't profitable yet because there's no need to be as the opportunity is so great, that showing a profit would be a big mistake. look, i get that, amazon's been saying that for almost 20 years, it's been a gigantic winner. the terrific momentum cloud plays that are attacking these gigantic install bases, they can't afford to be too

profitable, it makes sense, well, let's say it doesn't make sense if you want the highest growth possible. and there are plenty of buyers in the public markets who accept and even cherish the logic that the opportunity's too great to restrain it by becoming profitable. what you might not realize is that newly public stocks like a management software provider or paylocity, or q2 holdings, a maker of cloud based holdings cannot go to these insame premiums without big money piling into them to take advantage of what they know will be hot deals. they want the pop, people. and money doesn't grow on trees. it has to come from somewhere. now, we know that money's been flowing out of the stock market for ages, going into more conservative investments. the question is, where is all this excess capital coming from for the ipos? what are the money managers selling so they can drive these to crazy premiums? the answer, it's simple. it's coming from the more established technology companies, whether it be existing or data management or from the big biotechs as these

firms that chase these momentum companies tend to be kind of group think mode. that's what we've been seeing since the vicious downturn in the nasdaq started. it's one of the chief reasons i've been telling you please be a little careful with some of these established players because the shareholders are hardly your friends. no one got hurt taking a profit. they want to preserve their gains and get in on the hot deals coming fast and furious right now. these ipos give you an instant reward. but the more established techs and biotechs are dragging you down. unless you've run money professionally. you probably don't realize how much group think there is. always the same playbook. that by itself isn't worrisome. we've had good runs. what concerns me more with, say, these new storage ipos or grubhub, the online food ordering company, why haven't the established gigantic public companies snapped them up if they're so darn valuable and great. b for example, apple, why isn't

apple pay upping for dropbox. ibm likes to expand in cloud offerings, why doesn't it buy box for the enterprise? why doesn't amazon book grubhub? to me, these deals aren't happening because the venture capitalists and the bankers know the public and the mutual funds will pay up to own these stocks because they have the right buzz words and right opportunities. in other words, whatever price of corporate acquirer might be willing to pay for these companies is far, far exceeded by the public markets. needless to say, the swapping of money is what's truly worrisome about one segment of the market even as other parts seem to be doing fine. the mccormick spice kind, the walgreen's kind, that's doing fine. this doesn't mean we can't overdo the selling. the bounce today in a handful of the senior growers that are already public seem promising for the bulls, particularly biotech. that's the action i've been waiting for to declare stability. keep in mind, though, not all these newly minted ipos should actually be public. some should have been acquired, and some should've gone only to a modest premium until the window closes on the ipos, you

can expect to see more pressure on existing companies, but when box, dropbox and grubhub occur. that's the way it's always been. stick with cramer. [ male announcer ] meet jill. she thought she'd feel better after seeing her doctor. and she might have if not for kari, the identity thief who stole jill's social security number to open credit cards, destroying jill's credit and her dream of retirement. every year, millions of americans just like you learn that a little personal information in the wrong hands could wreak havoc on your life. this is identity theft. and no one helps stop it better than lifelock. lifelock offers the most comprehensive identity theft protection available.

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i like the pricing, but you've got to watch me tomorrow morning for the interview. there's always a bull market somewhere, i promise to try to find it for you. i'm jim cramer and i'll see you tomorrow! hello. you're watching "worldwide exchange." welcome to today's program. let's scroll the headlines for you and tell you what's coming up on today's program. facebook ramps up the shopping spree. the social networking giant spendling $2 billion buying up virtual headsetmaker occular. promoting key positions of the 21st century, but miss out on the top job at fox? kingfisher prices its ipo at 50