b-plus. kind of a quarter here. if you're long i think you use the 200-day moving average, 105 as a stop to the down side. >> i'm melissa lee. thanks so much for watching. see you back here tomorrow at 5:00 for more "fast money." mean tooirnlgs don't go anywhere. "mad money" with jim cramer starts right now. hey, i'm cramer. 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. 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 you some money. my job is not only to entertain, but to teach and to coach. call me at 1-800-743-cnbc. or tweet me @jimcramer. finally, finally we got a good set-up. for once we had leadership other

than f.a.n.g. my acronym for facebook, amazon, netflix and google. when they try to lead, nothing else follows. that's why we could rally as hard as we did with the dow roaring 190 points. the s&p 1.24% and the nasdaq jumping 0.98%. sure, it might be a one day wonder. no it could be. but wonder of wonders it did happen. i often talk about the set-up of a given day. typically when i'm "squawk on the street" i like set-up or i don't like the set-up which is the case for ages until today. when i said, holy cow! this set-up could be a good one. too many people got negative. the market's oversold. and like i said last night, it would take tremendous discipline to buy something. remember the -- what i gave you, which is a sign that we're arriving from the short term bottom. i want to give you a blow by

blow of what defines the set-up for me. and why today's so positive versus the unrelenting negativity we have gotten used to lately and the whole set-up will strike you as being counterintuitive. it all starts with china. because remember we're shackled to china when it's bad but when it's good we're free to trade on its own. we left thinking china would be bad and we were not disappointed. >> that was easy. >> baidu, which has the people's republic all to itself, just reported here it is i'm naming it the worst quarter that i have seen in 2015. hence why baidu stock plunged 15%. the expenses soared 81%. that's just plain absurd. they soared because baidu is trying to be all things on the web. i'm calling it a sort of online

poo-poo platter. take everything from amazon to netflix and grubhub. that has to be one of the dumbest ideas out. there think about it. baidu has the search market all to itself without google yet it decides to go after every cockamamie area of e commerce where it faces genuine competition, these guys are nuts, they're nuts! they know nothing. the worst part of the conference call, the mention of one of the original shows called "running man." ial a tell -- i am telling you this thing -- it's a cross between the bachelorette, mcgyver, fear factor and "american idol" and the first time i could remember watching a show and praying for a commercial break. anyway, next thing you know the market opens up down 4%. i said wow, this is the positive set-up i have been waiting for. instead of china opening higher, filled with hope, we're opening

opening -- or opening flat, it finally opens down big. that is the maximum fear signal i have been looking for and i said to myself the chinese communists have some game they trapped the short sellers. trapped them like rats. they allowed the weak hands to sell and they're going to come in into the market with guns blazing and walk this sucker right back up. taking it up for the night before gently letting it come down a bit and holding it there. down a percent. me, in china's uber bear market that's a victory for the bulls and that's what happened. that rebound took the pressure off the u.s. and you saw the rise in the s&p futures immediately if you're like me and just decided not to sleep last night. next up, oil. every day during this whole hideous decline we have seen oil try and fail to hold its own in the early morning. it's been pure torture. not this time.

no, last night there was instant capitulation as it was off 70 cents in the early morning. finally the pattern is broken and we get the long awaited defeat of the remaining bulls that early morning capitulation allowed the new buyers to rally. with oil up and the chinese communists back in the game we had a chance for rally. but if you're a bull you don't want to see a rally from the get go. it brings out too many sellers. voila, we got a muted opening. you know i hate big openings. i adore tepid openings like today. oh, but with the -- would the stocks play along or would it would be led once again by f.a.n.g. facebook, amazon, netflix and google, without any followers? just as the average started to take off. f.a.n.g. faller thetered. we found the industrials and the oils both of which were severely

oversold because of the weakness in china and it was like two jack boots coming off jugulars. blood started to flow again. today's run wasn't about the so-called macro issues. there were individual stocks that created a more positive environment. for instance cummings had been expected to report disappointing results just like caterpillar. no surprise went on the heels caterpillar announced an accelerated buy back plan. they restored hope to the bulls that not all is lost. and then dr horton kitchen cabinet and bathroom fixture company, they posted excellent results. we know that transports have been hideous of late. despite the decline of oil. see, i had to figure things would only get worse when we got the reportings from norfolk southern and they were no-brainers for the short sellers. but u.p.s. reports an actual

legitimate upside surprise with tremendous commentary even about europe. the stock is up 5%. and it wasn't even more terrible than union pacific. another short squeeze, norfolk southern jumped. last week, carolyn boroden, she made a bold call saying if exxon could hold at $80 it could be a springboard for a huge move. sure enough after pulling back below $80 exxon then managed to retake the threshold this morning. next thing you know it's up three bucks and change or 4%. that's a huge move. exxon is a $344 billion oil colossal. now for days i have been telling you to watch the gold copper and oil producer for signs of life. an important proxy for china, but it's acting like a goner. freeport, it looked like it would be another downer opportunity ill -- until they surprised plans to cut capital.

shazam, a short head slammer. before we get too giddy, let's remember the fed meets tomorrow. ifn't it is concerned about china and says it has to raise rates quickly, then -- ♪ she's super freaky now ♪ >> rick james can i have my show back one day? all this positivity will vanish. second, we get oil inventories tomorrow with earning and then later on earnings from chevron and exxon. then we have the nasty rig count. we need oil inventories down, we need the rig count to be down or else oil will start retreating again. and the chinese government can take a powder. so here's the bottom line. the shorts have had the run of the joint. they sense eventually nerpvulnerability. and that is one that can last if china, the oil and fed and earnings so far, so good with gilead and twitter cooperating. that's a tall order to have everything go right. it did happen today. so it can certainly happen again. how about william in ohio, william?

>> caller: hey cramer how is it going? >> going real good. how about you? >> caller: doing very well. thank you. well, look, i'm currently a college student who just got into equities. and what's in the -- within the past month i invested in a month that reported stellar earnings today. what's your perspective on the ford motor company? >> i thought they did a good job, the stock going to try to climb. remember, the international head winds are really great. not a big short base. you need a short base where a panera bread and everyone bets against it and then it goes up huge. that's what i'm looking for. that's what happened tonight. you need a short base and ford everyone is long it people like it. so you don't have the kind of dramatic move i'm looking for. bob in new jersey, bob. >> caller: hey, jim, thanks for taking my call. i know what your opinion is on honeywell, but i was wondering what you think long term of johnson controls? >> that stock has gotten too beat up. it's all the way down at 44.

now, ingersoll rand reported an analogous situation. so it's possible that jci reported not great number too. but that stock down at 44 is a little bit too low and probably seems right. how about that panera snap back good for those guys. we have a decent set-up thanks to the leadership that isn't f.a.n.g. and if china and fed and oil cooperate, it can last. later on tonight, can core labs keep rising amid the roller coaster of crude? i have the ceo. will china and the fed put us back in the house of pain? we'll find out. and a farming play up 15% this year with the fresh outlook for the rest of 2015. stick with cramer! you have the set-up. now it's your turn to score. from china fears to f.a.n.g. cramer's on the markets' every

move. his final take before tomorrow's trade. coming up on "last minute mad." >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. so you're a small business expert from at&t? yeah, give me a problem and i've got the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep them all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberyy apple scones smell about done. ahh, you're good.

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today we got a miraculous rebound and the price of crude oil finally came out of free-fall and went higher. but even before that session, there was something odd happening. while the oil companies were guess eviscerated day after day, some of the service plays were hanging in there and roaring higher. take core labs the company i refer to as the scientists of the oil patch. because it uses its technology to analyze rock and fluids in oil reservoirs so that its clients know the best places and the best ways to drill. last wednesday, core labs reported second consecutive better than expected quarter.

and company's revenue came in significantly above what wall street was looking for which while down 43% from last year was up 13% versus the previous quarter. they gave stronger guidance for the full year. no wonder the stock shot up and then after a brief pull back since last week. it's up thanks to the $8 run nearly today. all this suggests that the company's business is a lot more robust as core labs has been able to thrive at a time when the price of crude and the stock and the oil producers have been punish punished. they have been a voracious buyer of their stock and they have debts to shares outstanding during the first half of the year that's a big buy back. let's check in with david demshur, the chairman and ceo, to learn more about the quarter and where the company is ed

headed. welcome back to "mad money." >> thank you for having me. >> how is it possible with oil collapsing you're able to expand margins and do better than expected when everyone else's margins are shrinking and doing worse than expected? >> well, jim, we provide new technology to the oil industry in the every quarter. last quarter we looked at the phase behavior relationships of the three fluids that are in the reservoir and what we're able to determine is based on the phased behavior relationships, we can help our clients the b.p.s, the exxons, saudi aramcos of the world squeeze more oil out of the fields that they have. when we look at the lower tertiary trend, one additional percent of recovery is worth $6 billion to our clients. so our clients will pay for technology, knowing that the return on investment in paying us for that technology and those data sets they will get a very,

very smart return. >> well, it's definitely working out. you made some calls on this quarter that i thought were -- that i wanted everyone to hear. first, you said that you believe that -- i'm going to quote this. you do not think sub $40 is a distinct possibility six months to one year from now. it will be back to $60 due to the dynamics of the shell oil and you talk about the depletion of the shell oil and you're talking about a phenomena you describe just now of the saudis and the russians pumping too much. can you talk about why we're hitting a bottom in the price of oil right now? >> yes, jim, if you look at that aif -- every oil field has a natural depletion curve. looking at the u.s. and the production that we have added, some 5 million barrels, these are ultra high depletion rates

in these tight oil plays. when we look at the bakken when we look at the eagle ford the wolf camp in the first year an oilwell that produces 1,000 barrels a day in the second year will only produce 300 barrels a day. so it's got a 70 pshss -- 70% depletion rate. this is following the second year by a 40% depletion rate and the third year 30% depletion rate. you can see a lot of the crude oil that we have added here in the u.s. had the high decline curve rates and when drilling falls and it has fallen sharply over the last year it won't take long for that natural decline curve to impact the u.s. production rates. as a matter of fact, we're calling for u.s. production to fall from about 9.5 million barrels a day at the end of the year to 9 and then if activity levels stay where they're at it will fall a further 5 to 600,000 barrels a day and go sub

8.5 million barrels. with respect to production in russia and in the middle east we do not believe that these production levels are sustainable. when we look at russia, the amount of oil being produced there its natural decline curve rate is going to be above 2.5%. the worldwide average is about 2%. and in the middle east, we have those producers producing full out and those levels of production are just not sustainable over the long run. >> so let me understand. what you're saying it's possible that we can have a big decline in the amount of oil we produce and that the saudis who you say are pumping full out can't keep this up for much longer. >> well i'm pointing to the entire middle east not just saudi arabia where we have maximum amounts of oil being produced from about all of the major producing countries there. as a matter of fact, if we look at the amount of spare capacity which they're able to raise their production rates, it's almost at a zero rate. >> wow. >> that's the first time that's happened in a very long period.

>> okay, now, in april of this year you did say you felt that crude could -- crude oil brent up in the 80s. in this call you hinted it might be back to 60. do you think it's going end up at 60 or 70 or west texas at 70 by year end? >> i think it's somewhere between 70 and 80 by year end. >> really? >> that's owing to the large trend rates and we will see it at the low 80s. >> we're at a bottom. >> i think we are bottoming right now on crude oil prices. we will see production over this next several months jim. where we'll start to lose 50 to 100,000 barrels per month. and when that indeed does happen, you'll see a sharp recovery in crude oil prices. >> david demshur who knows more about this business than anyone we have had on the show the president, ceo of core labs. >> always enjoyable.

>> study the conference call. completion rates and saudis can't pump as much as they have. that could be the combination that makes it so we're not that far from bottom. "mad money" is back after the break. coming up -- nightmare on wall street? the market's fear index could be heading higher. leaving stocks on spooky ground. when it comes to your money, should you beware of the vix or is there opportunity to be found? cramer's take next.

after brutal week where the dow plummeted 660 points in five straight sessions and the s&p lost 2.8% of the value thanks to fears about the melt down in china and the upcoming fed meeting tomorrow, today we experienced a nice rebound. that's why it's so important to ask ourselves if the pain and fear has already been baked in which is why tonight we're doing a special no huddle version of off the charts with mark sebastien. he's the founder of option pit.com. as well as being my colleague at real money.com. he's the resident expert on the volatility index or the vix for short. it's widely viewed as a terrific proxy for the level of terror in the market. and right now, despite the vicious declines over the last week, the volatility index dropped below 14 today which

suggests we might be in better shape in this stock market than you'd imagine. take a listen. at the look charts of the s&p and the volatility index. at the height of the greek crisis three weeks ago, the vix briefly rocketed above 20. that was the first time since late january. suggesting a very high level of fear, especially when you consider the vix has only closed above 20 once this year. but then the vix pulled back dramatically and has had the lowest close of the year literally within years of the greek deal coming to fruition. well, what happened his attention is the s&p 500 failed to make new all time highs, despite the fact that the vix hit its low for the year. usually when the vix is going down the s&p is going up and vice versa. those are why we say so -- stay to focused on the vix and then we get slammed with the full force of the chinese stock

market crash. you think a break down would scare us more than the woes of greece. that's a country of only 11 million people, but judging by the action of the vix that hasn't happened. as of last night before today's rebound the s&p 500 was only about 20 points above the closing lows from the lowest point during the greek drama. yet, the volatile index was at four points below the peak panic levels we reached when we were freaking out about greece. take a look at the next pair of daily charts showing the s&p 500 and the vix. this circle on the vision chart covers the period between june 30th and the greek referendum on july 5th. that's when people were very afraid of what might happen in europe. the volatility index stayed above 16, okay. during the whole span of time. yet, right now after the chinese stock market crashed and the hideous beating that the stock market has taken, the vix is

still well below where it was leading up to the greek referendum. last night, the vix was at 1560. now it's below 14. suggesting that there's a lot less fear now than there was when we were tearing our hair out over europe. in other words the vix has been making lower highs either s&p 500 has been slammed making lower lows day after day until today. this matters to sebastien because the fear index is supposed to surge when the stock market goes down. but it hasn't gone up anywhere near as much as you might have expected. when sebastien sees this kind of pattern, it makes him think that the stock market is getting ready to roar higher again. sure enough we rallied nicely today. sebastien said he would not be surprised if we got more room to run. especially considering how oversold we are. in fact holy cow, sebastien thinks we could see the s&p 500 pop to new all time highs. with the volatility index

falling down to 11. granted the volatility index is on its way to being up year over year, but whatever it is going to take this market down a peg he doesn't believe it will be a crash in china. sure sebastien believes our big intermodal year rally will run out of gas, but based on the action of the vix he doesn't believe that time has arrived just yet and if the fed decides to be logical tomorrow and once again pushes off raising interest rates to a later date because of the situation in china, sebastien might turn out to be very right. you know i'm gratified that today we were led by stocks other than f.a.n.g., facebook, amazon, netflix and google, which means we could have a set-up that could have real staying power. sebastien's work confirms it and could be compelling stuff if china goes down softly rather than viciously and the fed tomorrow says nothing of import. i want to take a call from colin in new york. colin? >> caller: big brooklyn booyah, jim. >> right back at you.

what's up? >> caller: i wanted your thoughts on black stone. i wanted to know how you felt about the fed rate hike with them. >> okay, i actually like black stone. they have got a ton of property that's worth a lot of money. they have a lot of good things in the pipe. it yields 7. i'm not concerned about the fed raising rates. i think it's a good situation. i would stay long blackstone group. will our intermodal year rally come to the end? i believe we can have real staying power judging by what sebastien says about the vix. we'll have a deeper dive into the chaos in china. we have seen these brutal moves before. then look at agco go. they're up 15% this year showing no signs of stopping. i'll see if it can keep cultivating gains in my exclusive with the ceo. plus your stock calls are ahead in the lightning round. stick with cramer.

tomorrow -- kick off the trading day with "squawk on the street." live from post nine at the nyse. >> serious, i'm no longer sleeping. i am watching this chinese -- i have stopped sleeping entirely. because sleeping makes no sense. because we're china. >> it all starts at 9:00 a.m. eastern.

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for over a week up until today's rebound, our stock market was put through the meat grinder thanks to the bear in the china shop. i'm talking -- about the crash in the chinese stock market that resumed once more with a 8% decline on sunday night. although the market only gave a percent last night. easy come, easy go. now everyone knows that china's stock market has become a serious problem for the whole world, but how bad are things looking over there? we'll go off the charts with tim collins, get a better read on the collapse and maybe the coming further collapse in chinese equities.

first, all right, maybe hide your eyes. little kids put your hands -- parents, put your hands over little kids eyes right now because i'm going to show you a hideous daily chart of the shanghai stock composite index. the broadest benchmark for the chinese market. even before that horrible 8% collapse sunday night, collins points out that this chart was looking pretty troubled. we know that the shanghai composite good obliterated, losing roughly a third of the value in less than one month. and while the crucial chinese benchmark had managed to rally for the last couple of weeks collins said that the pattern created by the rebound is quite negative, not positive. after the gigantic decline in june he used the wedge shaped rally in july. this is the rising wedgie. a wedge. as nothing more than a bearish consolidation pattern. where the shanghai composite was merely marking time before the next leg down and it's not just

the price action. take a gander at the slow statistics at the top of the stock. this helps them and he notes they were in extreme overbought territory right before sunday night selloff. right here you see that? meaning in the july rebound the shanghai composite had run up too far and too fast and was due for a nasty correction. like that. plus, we saw a bearish crossover in the indicator. where the black line goes below the red line. which according to collins typically is a sign that we're about to get a sharp pull back in the shanghai composite. but when you combine what we see in the sta castics with the relative strength or the rsi that's an important momentum indicator at the bottom of the chart, things look more grim. the rsi has been stuck at under 50 for some time indicating that momentum is in the hands of

the bears. oh, to make matters still worse, he points out that the shanghai composite 44 day moving average, that's the red line, okay, has now crossed below its longer term 55 day moving average. which is the sort of chinese equivalent of what chartists call the death cross. in short, collins thinks that the chinese freight train -- >> all aboard! >> has now come to a screeching halt. and changed direction. and is chugging rapidly toward bear town. but there's another way that chartists might view the break down and that's using fibonacci ratios. they repeat over and over again in nature and the stock market. 23.6 38.2. 50. 61.8. and 100%. so check out the daily chart of the shanghai composite with key

fibonacci numbers superimposed. the recent moves are a fibonacci trader's dream come true. remember, before the chinese market blew up, it was having an epic run. so if you go back to the start of the rally in october of 2014 and you measure through the shanghai composite's peak last month, we can see low the fibonacci retracement levels have played out. first of all, collins notes that the initial decline briefly stops at all three pretty interesting, all three of the fibonacci replacement numbers. takes a beating after giving up 38.2. it take -- and of the previous rally. then at 50% we get another breather. and then at 61.8% we got a third breather. yes, that is actually -- that marks the bottom of the shanghai market. the bounce took the chinese market back up to the 38.2 retracement level. where it peaked sunday night. guess what a 50% replacement. i mean, this is retracement.

this is incredible. i mean, this is just a fibonacci fibonaccifibonacci nightmare. collins believes that the patterns can help go forward. we have a ceiling resistance at 4,066. that's 38.2% and a floor replacement of 3,383. from the peak from early in june. if either of the levels gets broke on the upside or the downside you should expect the shanghai composite to continue moving in the same direction for a few days. but if you want to get your head around what's happening in china, you need to see what's happening in the shanghai composite weekly chart. this puts things in perspective. the shanghai composite went from being basically range bound for ages. look at this thing. this is like nothing was happening. nothing. kind of a steady eddie rally in late 2014 to a crazy town style euphoric, parabolic, glow off in 2015. after the initial crash that

started in june collins points out you can see the july rally in the form of a little wedge here. and he thinks this pattern is quite bearish. this is the pattern he's referencing. this key chinese stock market benchmark does have a floor of support around 3400. not that bad. although collins expects it to break down below that level in the not too distant future at which point he thinks the shanghai composite will trade sideways and in the yellow box we'll mark some time in this region according to collins. now, if the shanghai composite pulls back all the way to the pink box 2700 then collins says we'll be looking at a repeat of what the tech bubble imploded in 2000. given that we live in the u.s. and not china, collins thinks it's important to monitor the chinese stock market longer term as well as the s&p 500. so far, collins notes that there

isn't a strong correlation between the shanghai composite and the s&p. of late i would disagree with him. collins thinks it's important to monitor thelation correlations for now, but he said the impact is only psychological. it is true. we didn't gain at all from the rally. but i don't know. i mean i think that we had that dip -- a little coincident with that. let's say that listen right now the correlation is not holding up. but what about the analogy to the popping of the tech bubble back in 2000? all right, look at this chart. which shows the nasdaq composite from october of 1999 through the summer of 2001 in blue and the shanghai composite of to date in red. so far the similarities are pretty stunning with the composite falling exactly in the -- it's the same chart. if i didn't know you it i told you listen which is it you would say the nasdaq 2000. the rally is similar. now that decline is following in

the same trajectory. what can we take away from the fact that shanghai composite is repeating the implosion of 2000 and that china might have years of pain ahead? even if it follows the same path there's some big bounces over the mex couple of years. overall, the chart suggests to collins we could see a total wipeout. total wipeout of the shanghai composite's huge run that began last october up. if china is to avoid the same fate of the nasdaq 15 years ago they need to find a floor of support and a new trading range. up something that the nasdaq was unable to do for more than consecutive four months. this was the relentless you know, just the relentless decline that never really stopped. i mean, a little break. but then it was just forget about it. okay? here's the bottom line. history may not exactly repeat itself. but when it comes to the current crash in the chinese market and the nasdaq meltdown 15 years

ago, it certainly rhymes. now, all right, so what could make all of the -- make all bets off here? maybe the communist party watches our show. and knows the levels and will try to save the market from them, but that may be too tall an order even for a totalitarian command economy. "mad money" is back after the break. [dad]i wear a dozen different hats doing small gigs,side gigs...gig gigs. quickbooks self-employed helps me get ready for tax time. to separate expenses,i just swipe. it's one hat i don't mind wearing. [passenger] i work for me. and so does quickbooks. it estimates my taxes,so i know how much stays in my pocket. and that's how i own it. [announcer]stay in the flow with quickbooks self-employed. start your free,thirty-day trial today at join-self-employed-dot-com.

>> announcer: lightning round is sponsored by td ameritrade. >> it is time. it is time for the lightning round. cramer -- >> sell sell sell sell sell, buy buy buy buy buy i -- when you hear this sound -- [ buzzer ] -- then the lightning round is over. are you ready, skee-daddy? let's start with alan in california. >> caller: booyah, jim. calling from glendale, california. >> well i lived there too. what's up? >> caller: i wanted your thoughts on hhbt -- >> i mean habit is good. i prefer jack in the box. i thought chipotle reported a rocking quarter last week. i like them better.

tom in new york. >> caller: thanks for taking my call. >> of course. >> caller: my question to you is about the oil patch. i want to know how safe the dividend and the growth dividend about em breg -- >> enbridge is very solid. we need all the pipe we can get. those are where we need the infrastructure. i think you -- i think it's okay. i really do. let's go to gabe in new york. gabe? >> caller: booyah from brooklyn jim. thanks for taking my call. i wanted your thoughts on taser. >> i have been a big backer of taser because it's the only way for cities to have immunity or indemnity against some of the charges if their officers -- if everyone is taking pictures and also we stop, you know, the kind -- we all know what negative stuff that's happening. i'm not picking on anybody. ryan in california, ryan? >> caller: hey, jimmy, you may

be the most efficient stock in the emp space, i like continental resources. >> any only reservation is the bakken depletion is really great, but i think that oil can come back and continental will be one that comes back very hard. jean in arizona. jean? >> caller: yes, mr. cramer, i'm new to your show. i'm enjoying it. i'm 77 i'm a senior like a lot of people i have been hurt. i have two quick questions. one is i have sfl. i want your opinion on that. if i may, i have one more question. >> okay. look i think that nordic american tankers is one to own in the group. that's the safer one. i feel good about it. and they're withstanding a lot of pressure that's the one to go with. paul in new york. paul? >> caller: jimmy kodak. eastman-kodak. >> you know, we looked at it the imaging business. we think this is one we can recommend and we could not pull the trigger. just not good enough.

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as much as we have been fretting about the wholesale declines in energy and metals pretty much all commodities, the fact is that agricultural commodities have been getting slammed over the past year too. how, despite falling prices of

soy and bean and cotton, they planned wisely and executed well and they have been able to deliver some solid performance. take agco, the third largest maker of tractors and combines. they have come down big time agco has seen it rally 16% year over year. it is up only 1% and this is despite the fact that sales and earnings have declined significantly year over year. nevertheless, they reported this morning and they delivered a 25 cents earning beat with in live revenues. and we gave them a much higher than expected forecast on the top line and the bottom line and that's why agco was up this morning. in part because the agricultural complex is out of favor. but here's how i look at it. if they can beat the numbers when crop prices are falling left and right, can you imagine how well it can do if the ag commodities started to

stabilize? let's look at it with martin richenhagen and hear more about the quarter and the outlook. welcome back to "mad money." >> thank you. a pleasure talking to you today. >> martin did it happen? you told us that there would be a trough, that you would buy stock into the trough. and now the stock is soaring. is this the scenario playing out that you describe to us? >> pretty much so. so that means the markets didn't help us. they were even more down than we were assuming. but we did our homework. we started early and we performed about as you mentioned. guidance and also consensus. we can do a little boater we think -- better for the reminder of the year because of the tech rate, we could manage it down a little bit. >> you said production decline in 2015 is front loaded. you are -- are you being optimistic about this second half or are you taking out so many costs that you just kind of -- you're fine if things stabilize? >> i think i'm more realistic.

so i think in many markets, far more do better than expected. like in brazil, which is a big market for us. we have plenty of factories and 50% market share. farm income will be good because they are in a record harvest year. the riyal is not strong so therefore they're in a position to do very well on exports but due to the political environment environment, the farmers have a tendency to hold back investments. same problem in argentina. we heard a lot about ukraine, russia, some of the european markets. so overall, it's more related to the political environment than to a commodity price only. >> well hopefully that means it's shorter term. andy bach says we are seeing a

stronger order situation in hay equipment and small tractors in north america. is that an ar -- harbinger of something good or a one off gem. >> that's very good for us, because in hay, and in the industry we have a strong position with our factory and small tractors, we just launched a new range of -- they're made in china, by the way. therefore, this should be good for us. >> so your operation dropped severely in the last year or so. haven't they? >> yeah. that's our focus. we need to make sure we do it in a way that we can come back as soon as the markets come back. i personally believe that they will come back soon eor later. -- sooner or later. but the question is when. they could come back big time. like this is what i think could happen here in the u.s. so that means you need to be very cost conscious, but at the same time, not damage your capacity

possibilities. >> so you're thinking that there could be great leverage here because a lot of people would bet against your company. 18% of the stock has been sold short. you have been an aggressive buyer of your stock. you have cut your costs. is that the situation where a nominal increase in revenues can lead to gigantic earnings perspective? >> i hope so. well, if the markets are back you will see it raining through the roof. so that's what i'm hoping for. >> we are making a case here on this show that if this is what you could do when things are this bad and we don't think things could stay this bad because people still have to eat in this world, you can only imagine what you can do when your company gets better and you agree with that thesis? >> yes. >> will you continue to buy back

at this these prices or if they get back to where they are? >> no, we'll continue to do it at this price so we have a kind of a program. and we do it in basically -- in reasonable portions. i think my idea would be also to continue doing similar things in the future. so we have in our boy power to be in a position to also renew a buy back as soon as this one has been completed. >> well i think the ones who have bet against you are going to be sore losers, martin richenhagen, ceo of agco. well played. >> thank you very much. >> of course. now, look this is man with great conviction puts his money where his mouth is. buying back stock aggressively and what's happened? his stock is a winner. agco, i don't think it's done. stick with cramer.

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our fleet apps will find the fastest route. oh, and your boysenberyy apple scones smell about done. ahh, you're good. i like to bake. with at&t get up to $400 dollars in total savings on tools to manage your business. after the bell, two huge upside surprises in the restaurant business. panera which we are hoping will turn around and it has. and wild wings people keep betting against it. twitter let us down because that seems to be twitter's way. you know what, again, oil has to stay up. china has to stay flat. the fed has to do nothing. tall order in order to keep this rally going. there's always a bull market somewhere and i promise to find it for you right here at "mad money." i'm jim cramer. see you tomorrow.

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