ute, uteck. breaks 120, off to the racings and into earnings. >> i'm melissa lee. meantime "mad money" with jim cramer starts right now. mad mad money starts now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always more work 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 trying to make money. my job to not just to train you but educate and enlighten you. tweet me @jimcramer. negative newspapers control the flow in the morning. common sense controls it in the

afternoon. which is a big reason why they get slammed in the morning. with the dow closing at 4 points and the nasdaq climbing point 4% way out of the hole in the morning. every day the press puts new obstacle courses in front of us highlighting everything that's wrong. boy is it depressing. it's a regular clint eastwood-like gauntlet. sometimes days like today, we remember the consumers spending days with custom and the economy is doing much more than you believe. the news backdrop has become glooming with everything happening has been interpreted as bad for stocks. portfolio, oh boy i can't wait to see how they spend netflix negatively that rallied 60 points after an amazing quarter. i bet they find something negative about it. they just can't help themselves. when you look at it that way,

it's easy to understand this nasty decline. you'll also understand the renaissance later in the day. let's start with the wall street journal. it's a page that could cause you to realize how terrible things are. take a look at the upper right hand conner. fed holds to plan on rates despite, turmoil, alegended news here, the feds are standing by their plans to raise rates later this year. let's distill the story. it sounds frightening, right. when you do a closed analysis, all it says is something like what i've reported lately that the feds will raise rates later in the year another way to look at it the feds do something when it does something. there are issues around the globe that make us worry about a

decline in issues over seas. business is doing better in the u.s. that's not bad news it's good news. however, we know the fed is static driven and it would put the plan rate heights on hold. what i have to do is really understand it and i got to turn to mcbeth. it is a tale told by an idiot cig signifying nothing. oh boy. downer. now, washington has been off the front pages forever. the huge and costly fights between republicans and democrats have been the cause. with the budget deficit rapidly

shrinking we thought we wouldn't have to worry about tax increases. i've been writing the headline. we have to take it seriously in order to generate news heat. in other words it's more yes repeat after me shakespeare mcbeth. more sound and fury cig-- this is just empty by the president and anyone who takes it seriously do need to service. finally, there's china economic growth is slowest in decades article on the bottom left. i was awake when we got the

number showing china's gpa growth slowed in 2014. i said great when i saw it because the only people that were looking for it was 7.1% to be pulled down by a big time weak fourth quarter. nope china's economy grew been 7.3 pergs in the fourth quarter which is much more than expected. my headline would have been holy cow, what a strong quarter. i'm not kidding. i was thinking it might be 6%. china's 7.4% growth shows you how robust the economy is. sure the spending and infrastructure is not as great as we would like. that would benefit a lot of manufactures and building materials. this is coming from the consumer side. i say so what. we sell less copper.

we hit them with more funds. how about some facts? i don't know. facts get in the way of the story. i want to give you some of them anyway. it's not easy. now i've sought through everything and they're almost uniformly disappointing. sun trust was good. wells fargo will head back up and morgan stanley with flaws. i think the stock should have been up today, not down. there was so much negative press from people who don't understand morgan stanley. johnson and johnson seems to have lost a step after a strong beginning. it's fine if you don't own it. nothing to worry about. this decline was nasty. i am losing faith in the accompany. oh and speaking of losing faith,

we got a strong number from ibm tonight. hey guys i mean for whom the bell tolls. boy, that was tough to figure. more important, next flix shocked many with-- netflix shocked many with a 72% earnings. here's advice. let me give this advice to the people betting on netflix. if you're short this stock, you're not playing with a full house of cards. if you can't pay back the money, remember, orange is indeed the new black. in the end, the gloom couldn't obscure the possibility. tomorrow will be another negative day according to the newspapers. i'm already crying about how bad things are. watch them focus on ibm. again, i'm going to go over that

story with a fine tooth comb so i can come in and be negative about netflix tomorrow and join the crowd. the mood out there is still ugly and rabid and still articles that are negative. we're going to have to run the gauntlet of the negative news coverage. don't let it fake you out or you're liable to miss the next rally like so many. hey, you know what we ought to go to dave in florida. dave. >> hey, jim. johnson beach, florida. >> i've been there, love it. what's up? >> trying to help my 83-year-old mother update her portfolio and thanks to your help it's been going great. the last one on the list is price line. she bought it. it's been good but time to ring

the cash register. >> yes, i think there's a lot of competition. i think the stock will get hammered. if you want to get back in maybe. this industry has gotten competitive. that does worry me. can we go to ron in maryland? ron. >> yes, jim. maryland. maryland. >> yeah, that's right. i forgot. go ahead. >> anyway my question is a speculation because of the traffic in the stores, j.c. penny. steals increased by 4.5%. what's your feeling? >> i like winning department stores. these guys are doing the catalog. i like that. they have a lot of stores. there's good merchants like a costco going down here. i don't want to go down the food chain to a penny when i can get

a costco. can we go to william in new york. william. >> hey jim. very controversial stock lately has been optimal financial. do you believe the stock will return to a historical level? >> accounting regularities equals sale. there will be some situations that will snap back and i will miss. it fits my parameter. now, the headlines are glooming. it's easy to fall prey to them this easy in the earning season. i'm here to help you stay out of the totally negative height. i don't want to be critical, negative negative or skeptical. should you believe in the box? i'll tell you if you should be in or out. it's no secret i'm revealing a hidden hotel gym that's getting overlooked. are we nearing a major market

event? i'm going to see what's lurking in the technicals. why don't you stick with cramer. don't miss a second of mad money. follow @jimcramer on twitter. have a question tweet him. send him an e-mail or give us a call at 1-800-743-cnbc. miss something, head to mad madmoney.cnbc.com madmoney.cnbc.com.

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even though 2014 was a huge year with more deals than any other points since the year 2000. in resent months -- i bet we could get a big that you maybe as early as this week in the form of a new offering i want you to write down. this could get people excited again about ipo's. i'm talking about the upcoming of the initial public offering of box. b-o-x. the cloud base online storage accompany is expected to come

public between 11 and $13 a share. i think you should call your broker tomorrow morning and try to get a piece of this deal and pay up to 18$18. i know that's a lot but if you can't get in on the actual ipo, box is the kind of accompany that might be worth buying in the aftermarket. why am i a huge fan? what's common is drop box is going to become public in the future. box and drop box may belong in the same category they're very different businesses. drop box may be superior with truly staggering numbers. box is not just about storing your data in the cloud and sharing your files with friends. it's created a popular cloud base business collaboration platform that allows companies of all sizes to manage their data in a way that makes it easy

for workers. basically, box has cracked the code to file share with an enterprise with a powerful platform that's extremely easy to use. now, maybe you're familiar with the consumer offerings in both box and drop box. i'm telling you that doesn't matter. suspend your view. box wants to be the one to own. why? drop box is incredibly popular but hasn't figured out a way to to -- it's not where the money is. the consumer likes everything on the web to be free. the consumer is the bane of your existence if you're actually trying to charge for something. box, on the other hand is all object monotization and all about the enterprise. if you're selling to online stores you need to offer

security and consistency. they need to feel confident service isn't going to go down and data isn't going to be hacked. boxes done a good job creating an ultra resis tant -- resistant platform. being commercial is how you make money in the business. i know some people worry that the online storage space is becoming monotized. it's become a crucial component of the infrastructure and work day. that's a big part of the reason why box has been able to put up such incredibly strong numbers. in 2014 the accompany increased by 103% and revenue climbed 70%. if boxing keeps growing revenue

this year and the midpoint range, the stock will be trading. i got to tell you, you may think that's a lot but it's not at all expensive for a cloud based service. work day one of my favorites is 44% growth this year and trades at 9.9% sales. the average software is a service doctorate which tells me box could have real up site from the price p.o. box range. why the numbers are strong and the evaluation looks to be inexpensive, emphasis on the term relatively. whenever we look at an ipo, we like to analyze the bottom lines. box is run by a brilliant and charismatic young man.

he happens to be the founder and ceo in addition to having a dynamite head of hair. let me read you his quotation. there are phases in the technology pc to cloud, cloud to mobile, these things come around every 10-15 years and we're in one now. it's a catalyst for ip buyers to implement the technology they're going to run businesses off of. it didn't exist in 05, 06, 07, 08 or 09. i think it's going to give you a big spike right out of the gate. even after the initial spike, i bet box will be able to keep running. that's because one of private shareholders here is general atlantic and they have a fabulous track record both as a accompany and with mad money.

last they tried it. they give you a 104% gain. even as many viewers were able to get in on the deal we talked about because it wasn't expected to be a big win. it wasn't one of those things that crashed. even if you couldn't get a piece of the deal and you had to buy it in the aftermarket, you still made a fortune which makes the stock neat. that's because they want everyone to win. that's their style. employees, partners, bosses buyers, everybody. here's the bottom line. i say bet with general atlantic. try to get in on the box ipo. call your broker immediately. if you can get a share, i think the gates will be enormous. if you can't get a piece of the actual ipo, i advise buying 8%

below share where they will still trade to the software as a space. much more ahead including one chain hotel getting a big boost from cheap gasoline. i'll unvail it ahead. i'm taking the poles for the fear index. warning signs pointing to a big move in the future. i'll help you with a battle plan. plus two major oil companies, what they could say to help you. i want you to stick with cramer.

as i've been telling you for months, the plum etting price of oil -- the plum meting price for oil is a tremendous boom for the american consumer. one that's equal to $1,000 tax rebate for every household there's 117 million of them in the united states. that's why most are tied to the american consumer like the domestic retails and restaurants. there are some consumer focus thoughts that have been left behind by the move and i want to take you bargain hunting for a major name that's been flat lined during a period where i think it should be higher and that's lq. the select service hotel chain

has 850 locations. 95% of its rooms are located in the u.s. unlike other hotel companies with spoiling international operations, they don't need to worry about the weakness in europe. something that's failed one of my old favorites starwood of late. have you seen that. it can focus on the strength here in the u.s. where consumers have much more money to spend on travel and taking a long road trip. it's become more cheaper thanks to the newfound ultra low price of gasoline. hey, buck 98 this weekend. i had to drive 25 miles out of my way to get it but i got it. you might think lq should have scored higher over the past few months. in fact the stock has done next to nothing. looking back since the decline in oil began, this stock has rallied just 5%.

i think the relative underperformance is giving you a ter i havic buying -- terrific buying opportunity. part of the reason i didn't like lq stock has done next to nothing is because it's an under the radar name. it came public when the market was flooded with ipo's and more important, this was the third of three hotel companies to come public in six months. there was hotel ipo on wii. on top of that they've been held back by the fact they do more business in texas than anywhere else. as 25% of the rooms are located in the lone star state. if you give too much business in texas you're going to get slammed. i think that's lazy thinking. the case has been dead wrong. the accompany released 8 k this

morning. according to the file, the 12 months ending september 30th oil and gas related nearly 3% of the system wide revenues and 2.2% of revenues from accompany owned hotel rooms. even if the oil industry implodes that won't make much on the debt of the business. i think people are beginning to realize this was the wrong call. now that you know why lq has been lagging lately let's talk about the next 12 months. not only do they benefit from a stronger consumer but lq is a terrific operator. cutting cost boosting profitability. they're familiar with the business to the point the ceo can tell you exactly how long it takes for housekeeping to clean

the average room. 21.4 minutes. every minute shaved off this process is worth 2 million to the accompany annually. please come on the show. the margin of the accompany hotels come in 50% higher than the 30% margin at the average hotel. this thing should have a premium multiple. in many ways the story is about the brand. they only have one brand which means management can focus on one. a bit more than half of lq's locations are currently franchised and the accompany hasn't raised the franchised business model. from 2003-2013 it had the fastest franchise growth. i think the growth opportunity here is pretty enormous. has lq has a lot of room to expand throughout the u.s. we know there's plenty of demand for these mid-range select service hotels which is why the

big boys like hilton marriott and hyatt has been moving in. plus, lq has really under underpenetrated this country. they're present in 64% of market tracks. they have 16,000 new rooms and are being scheduled to be built and there's a 35% increase. however, the real growth opportunity is not adding new rooms and locations, it's improving the accompany's profitability profitability. lq was a prooifivate equity. the accompany has been using nearly all the excess cash to play down. management pays down the debt and cleans up the bounty. the management thinks they can

get the accompany's leverage down below four times the interest. once they cross that threshold and that could happen sometime in the section of this year, lq says they're opening capital share holds. thamd make sensement right -- that would make sense. right now they trade at a 30% growth basis. if you evaluate it on this bay si a lot do lq is the cheapest publicly traded hotel stock out there. it trades at 10 times verses 13.5. i wouldn't at all be surprised if the exchange stock goes to 25 in the future. for a 20% gain in the level, i want the gachbltin.

here's the bottom line. because they don't roor high, there's so many locations in texas they haven't participated in the rally because people are so worried about the oil business in texas. now, we know for sure the drops in oil prices won't hurt lq. you know what we should go to joel in florida. joel. >> jacksonville, florida jim. >> holy cow, the jags. you ought to trade that team in for another team. what's up? >> my wife and i have listened to your knowledge and perspective for several years. my question is about cracker barrel. it seems logical to me more -- lower prices at the gas point puts more money in people's pockets for restaurants. it has declined as well as

dunkin donuts. >> i would not put the two in the same camp. cracker barrel has had a monster, monster run. if you go back to 2013, i mean you're looking at stock, even august of last year the stock was at 93. it's at 132. dunkin donuts has been a big disapointment. even though i had a k-cup this morning and it wasn't bad. tim in california tim. >> i'm calling about ruby tuesday tuesday. the sector is hot and last week's black rock increased 90%. i wanted to see what you think. >> this is the height of inconsistency. i do not like inconsistency. if i wanted inconsistency i

would go by dardin. i want to go to tony in washington state. tony. >> hey. how's it going? >> real good, partner. how about you? >> i'm doing good. >> i'm curious to know what you think about sea world. >> you're from seattle a winning city and you come into my house and mention sea world, a losing accompany. i want you to have some fun. not like sherman. better yield, better accompany. come on man. you guys are winners. what are you like the 14th man? get to be the 12th man when you come in here. the stock won't get hurt by oil prices. it's time to check it. how about the warning signs pointing to a major market move in the future.

i'm digging deeper and going off the charts and i'll reveal how delta just gave us a great guide on whackt can win in this market and a brand new edition of the lightning round is ahead. stick with cramer. hiring new employees can be tough. but it doesn't have to be. because now you can post to over 50 of the top job boards with just one click- with ziprecruiter. find candidates in any industry, nationwide. just post once and watch your qualified candidates roll in to ziprecruiter's easy to use interface. find out today why ziprecruiter has been used by over 250,000 businesses. they even offer a 100% satisfaction guarantee. and right now, you can try ziprecruiter, for free. go to ziprecruiter.com/free30

in this increasing uncertain market, i think it's worth taking a closer look at the index, the vicks for sure. also known as the fareear gauge. it's known for the level of fear in the stock market. last week the vicks broke out above $20 and that's a huge level. that could signal things are about to get more difficult. why does this $20 level matter so much? it represents the long term historical average. when it's below $20 it means we're experiencing below. when the vix goes above $20, though, that indicates investors are indicating above average. we got to worry that the

averages could indeed get hammered. that's why tonight we're going off tohe charts to figure out what the index is telling us here. so what does it mean that the volatile index went up last week. look at the vix going back to 2012. it points out during the period from august 2012 to august 2014 they only settled 24 times. one, two, three and four. it is so rare. just four days. with the fear index high coming right before the cliff. since september of last year the volatile index has settled 14 times. in other words over the last

few months alone they've closed above 20 far more frequently than they did over the whole two years. did you know that? what are these resent spikes telling us? what does it mean for making money? it means the stock market has entered a new phase of uncertainty. from 2012 through the first half of 2014 the market was able to chug its way steadily higher. lately though they're reflecting the fact the market is no longer safe and reliable as it use to be. it's become more of a roller coaster and an unsafe one at that. it's not the fact the vix is breaking above the $20 threshold. it will do something to throw out a red flag. they will identify the red flags and see a very unsettling pattern that's in the volatility

index now. he's not just seeing one red flag. he's seeing a ton of them. check out these twinned daily charts of the s&p 500 and the volatileity index. this is since last november. s&p and the vix should have a correlation. when s&p is hitting new highs we want the vix to hit new lows. the vix should be making new highs, after all it's called the fear gauge for a reason. when the market plunges we expect it to be on the rise. remember, that's the inverse. market going up vix showing fear. that makes sense. lately we have been seeing a different pattern. the volatility index ramping higher as the s&p churns in place or makes new highs.

look at how the vix has been trading since november. it's been making lows. even when the s&p made all time high in late december. in other words even when the s&p 500 was showing real strength the index went higher. that can be a sign that something big is about to happen and usually, in the animals of stock market history, that something big has also been something bad. i'm just showing this stuff. what the fear gauges do is screaming. why don't we zoom out. volatility since last june. the big spike in october here. even though the averages snapped back from the ebola panic, sebastion points out since october they haven't come back from summer lows.

it never got down to that level. when it was trading just above $10 and entered the single digits. the index pulled back to $12 in since then. it's been climbing around and spiking higher and higher. for sebastion, this is a bad sign for the stock market. he's seen the pattern before. he thinks it's reminiscing of what happened in 2011 going through the debt crisis. now what we can do is take a grander at this chart of this volatility index from april 2011. here's a period you can see a period of calm vix then beginning to spike more frequently as it climbed steadily higher as its been doing lately now. sebastion says this is what it looks like when there's a lot of

uncertainty. look at the next chart which shows the index soaring through the roof of the next two weeks. back then there was a lot of uncertainty and then the debt crisis that caused the agency to downgrade its credit rating on u.s. treasuries and that sent the vix soaring. at the same time during this period, the s&p lost 16.5% of its value over the course of a single month. right now sebastion is concerned we could replay the 2011 scenario. of course, the averages might not get hit which causes them to tumble. sebastion says it's behaving and there's a serious possibility we could get slammed. what kind of event could cause the stock market to -- the program might not do enough good

to lift the struggling economy and you know we've heard a lot of people talk about that. the bottom line is the index by vix expert is signaling that a nasty sell off could be in the cards and in the future. here's the thing though. if sebastion is right and we get a pull back i need you to stay calm. the u.s. economy is in good shape here and euros have made excellent buying opportunities. mad money back after the break.

it is time. it's the lightning round. are you ready? time for the lightning round. i'm going to start with donna in texas. donna. how are you doing? >> i'm good. i'm looking forward to the special when you're -- prgo.

>> i think it's a bad cold and flu season and i think it should be doing better. i like the options it has with the possible take overs. ryan in wisconsin, ryan. >> hey jim, it's ryan calling from the university of wisconsin madison. i had a quick question on pdl. >> i'm going to have to say don't buy it. >> i want to go to craig in massachusetts. craig. >> cramer. >> i want to know about ambarella. >> people thinks it has the right guts. i don't like to play with guts

in inside. i'm not doing it with this one. let's go to mike. mike in texas. mike. >> thank you. charles s. >> i think that's a much cheaper stock. i don't want you in schwab. i want you to morgan stanley. john. >> hi jim, first i would like to thank you for your knowledge you share when the market is on a downward turn. my stock is gilead sciences. >> i think it's okay. let's go to izi in florida. >> good evening mr. cramer.

thank you for taking my call. >> of course. >> i'm a big fan. i watch you in the mornings and the evening. >> thank you. >> my question is about alibaba. >> we like yahoo. that's all i have to say about yahoo. and that ladies and gentlemen is the conclusion of the lightning round. >> the lightning round is sponsored by td ameritrade.

a lot of this shouldn't be this simple. you shouldn't be able to see the price of oil is down and sale the oil stocks. this is usually more complex. right now we have a bizarre complex of cause and effect it's so simple. first let's deal with tough stocks though. this morning two gigantic oil firms are trying to merge. they're constantly innovating order to make it faster and cheaper for oil companies to extract crude. i don't think they realize how special these two are. they are technology and there's a chance to maximize all the properties in a much more efficient manner. they use what i can describe as terrific quarters and their stocks went higher with a two buck oil decline.

they're realistic. they know 2015 will be a tough year but there's amazing things going on and programs being niche waited world wide. it's the same commentary we heard on friday. all three of these companies told us the united states has been the hardest hit by the decline in oil. however, there's something else that matters tremendously that doesn't get talked about. all three companies made it clear that oil and gas drilling made the best u.s. properties. the way they can meet obligations is the way they can generate cash flow. the only way to do that is produce more oil flow not less. if you put it all together i think the production growth can only increase this quarter and maybe next quarter. the u.s. players have no choice

but to over produce. if cut backs send the price of oil higher any time soon don't hold your breath which brings me to delta airlines. they had a growth in part because of the fact the customer is feeling more flush and therefore traveling more. sec, delta said it could see more than $2 billion in savings from lower fuel cost and tbd be more in 2016. plus the accompany bought a refinery not that long ago and they went to making 105 million and what's delta going to do with the profit? are they going to start proisice wars? no. they're going to pay down debt and return capital to you. they told us the cash flow was

better than 90% of the industrials. considering how much worth they have the idea of oil rallying seems fansciful. because of the tremendous swing in fuel cost they're going to profit. the losers are the domestic oil companies who have to pump just to stay in business. stick with cramer. tomorrow. kick off the trading day with squawk in the street. live from post nine at the nyse. >> why stand when you can sit? >> the mad dash didn't work and now we're thinking mad dash back. >> it all starts at 9:00 a.m. eastern.

please stop trading on headlines. as soon as ibm's headline came out the stock went up four points instandly and then they -- instantly and then they listened to the call and the stock gave up that and more. this is called doing homework. you look at the headlines and that's investing. what everyone else is doing is gambling. i'm jim cramer and i will see you tomorrow.

>> let's go. let's push it, guys. come on. >> stay under control. i have everything ready to go. >> we got to get this [bleep] going, man. >> male narrator: last season on restaurant startup... >> we are here for $500,000 and 20% of our company. >> narrator: hungry entrepreneurs got a chance to win an investment from two of the industry's heaviest hitters, joe bastianich... >> is it gonna happen? >> 15 minutes. >> narrator: and tim love. >> i'm the guy that believed in you guys. >> narrator: hundreds of teams applied. 16 were invited to l.a. to pitch joe and tim in person; 8 were put to the test. >> you need a fire extinguisher. >> narrator: by the time the tables were cleared, joe had invested in three businesses and tim made deals with two. >> i like it. >> you got a deal, boys. joe bastianich is one of the country's culinary giants.