also that carter worth was talking about. >> amgen >> i'm melissa lee thanks so much for watching. see you tomorrow at 5:00 for more "fast money." "mad money" with jim cramer begins right now test . 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 "mad money" starts now hay i'm cramer, welcome to "mad money. welcome to cram america. other people want to mike friend i'm trying to make you money my job not just to entertain by educate and teach. call me at 1-800-734-cnbc or tweet me @jim cramer here's something you may not

hear from anyone, stocks are cheaper. when you see stocks that help -- with the dow gain 41 points, s&p inched up .07% something is afoot no i'm not saying things can't go down from here, item saying something's happening that we've gotten this elevated to begin with what go i mean when i say stocks could be less expensive than they appear today? it has to do with the future of earnings and what we're seeing so far this morning johnson & johnson which has the best balance sheet, report a blistering numbers of pharmaceutical sales of 15% i department that from a bio tech company

when you look at johnson & johnson, this stock sells for just 18 times next year's earnings estimates how does that make any sense cole gate much cheaper growth sells -- only has a fraction, sells for 24 nelson pelts the investor who lost the election is upset that the largest consumer doesn't innovate anymore, it trades less than j & j i just think they're expensive and j & j is ridiculously cheap. how about united health group? we don't talk enough about this other than the political world

nut health group is selling for 19 times earnings. that's a substantial discount to its growth rate. the growth rate i might add of a small/medium stock 19 times earnings for 13% growth that's a steal which is why th stock rally 10 bucks today enclosed in 2006, all-time high. morgan stanley has the cheat sheet is getting better and better and better. and pretty much like clock work, business model put together by james gold win morgan stanley one of the best firms in the world with growth

jp morgan selling at 14 times earnings with the best growth i can recall, and a new rate cycle that can raise earnings by billions of dollars. companies doesn't need that sold to its work force to get that returned i'm telling you as someone who watches earnings and knows how people pays for them historically, these valuations are not cheap. they're ridiculous i could say the same to you about goldman sachs. the solid winning for most companies after the report lasted four or five days wait five days buy the stock with goldman sachs year line sell anywhere from 8 to 10 services i can't recall any other time in my life where they've been this profitable normally i'd say, hold it, be careful, the airlines are flush, they'll go by planes, offer more

flights, the competition will end up crushing their numbers. the cue from new plane is miles long our infrastructure's so pathetic in this company, there aren't many air ports we can add new gauge we went over the rerating with general motors but can you believe this company with autonomous driving coming up, it's going to be in manhattan now? come on man. how about allergan i'm well aware the stock has been lackluster as of late and lackluster's being a kind word for horrible. it's 50 bucks down in four months when you look at allergan's pipeline they can generate

sells, that's how long even the bears are expected it up here, not saying it can't go down, if it's allergan it probably will. but it's inexpensive now granted there's anomalies that make the stock work, seems over value we watch as general electric has become the best stock in the word new ceo's john ferry trying to turn things around it couldn't have been worse and ge is not getting better any time soon. when it reports on friday we'll figure out how much the dividend has to be cut. ge has very sup optimal reporting tactics under the leadership of two former offices, sup optimal

i think it's shameful. we need to see earnings to be real it could be a dividend report could be often by the time we see real earnings. we have high-profile stocks that doesn't fit with the multiple pardon makes people nervous i'm taking tesla, netflix, amazon all valuations to make younger investors furious. those who think young view tesla as a tex dot, tex dot has more higher evaluations as auto stocks and they see netflix as a great service. it's very hard to quant fie on those stories, at least alphabet and facebook could be justified. facebook earns 9 bucks in 2019

20 times underings for the the world's fastest growing stock. i know i would finally there's apple. okay omega. here's a apple, here's a company that's denigrated by -- i asked them, do you use samsung, really i'd argue apple's not a tech company. it's a best consumer company on earth. i think it can charge double for its service business and people would have to pay up because there's nowhere else to go it's the only ecosystem that is seamless, yet the stock sells for 15 times next year's earnings estimates, prices being controlled by the tech analyst and that's backing out enormous cord of cash you want dangerous, you want dangerous, i'm old enough to remember i traded in 1987 when

we crashed during this week in october, i traded that stocks was selling that day, 29 times earning for the average pedestrian joker stock interest rates worth 7%. we deserve to crash in '87 but now if we pull back you better have some cash, could be a gift i hear people say, but jim, this is peek earnings sure but i didn't see foreseeable peek numbers from a j & j. we don't see peek numbered from united health. news flash, not only have they been raising rates but it's good for financials which is a huge part of this economy i hear them say, hey, it's all a fit bubble, bubble, bubble,

bubble the dow has almost tripled since i've heard that argument there's koe jebt then and now, and i bet they'll be just as wrong this time. scott in any my home state new jersey >> caller: my question involves the proposed market of furm suit calls impact led by paul considering both short and long-term outlooks and giving ongoing pricing crisis in the generic drug industry would you be a buyer or seller >> i think it's good they merged but i'm not a big believer in the generic drug industry because thafr always seed so commodity oriented to me okay, hey listen up. i've heard the haters, hi

haters i've heard the fears it's now tripled since i've heard the haters, and fears. stocks are much cheaper than you think. on m.a.d. tonight this may be the greatest bull market but there's stocks being left behind i'm going off the chart to see if some staples are ready to join the market. then i'm focusing on nothing but netflix after earnings how did the stock fizzle today why don't we take a closer look. i suggest that you stick with cramer

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we know that the major arely

begans keep making new all-time high after new all-time high the trend is not just your friend, i could argue it's your best friend. but as much as i like to be all happy and bubbly and positive on the show, like our president that took credit for the rally, hey, whatever. the truth is you can't just look at what's working. if you want to understand the stock market you also have to analyze what's not working even if the greatest bull run is ages that is going on there are losers and lag guerras and they hope to find the action as much as the winners do. that's why we need to address the left-behind sector that is the consumer staples co-hurt a group that hasn't participated

in the last leg of this rally. so tonight we're going off the chart with how to prevent technician who is the managing partner of capital management as well as my colleague at real money.com. we're doing some greater stuff to get a better sense of what's happening with some space you probably know better than other. the consumer staples region. ponce want to talk fpf let's call it the ex lp. yes, this is an etf that follows all the major staples including proctor & gamble, philip morris, pepsico, walmart, costco,

walgreens and kol gate just to name a few while a border stock margaret is soring sore soaring to new heights the xlp is flowing ponce believes there are some potentially bearish developments here that could harrell a nasty decline. so many people have been hiding for ages because of those dividends. there's a lot to be concerned about from tech y'all perspective. ponce start out that consumer staples etf has made a head and shoulders pattern. right? that's a really pretty clear defining we broke down the neckline of the pattern. head and shoulders is a formation that looks just like the top of a person.

a head sandwiched between two shoulders and one of the most reliable patterns in each book whether you see one of these it's often assigned in a nasty pull back waiting in the once. you need to expect a sizable decline, if the s&p break down more that it have be confirmed bullish trend line, green. floral support, roughly a year now, it's in danger of being violated right now the florals of $50 and change, so is etf. if we go below this level it could signal a trend for the s&p. that would not be good ponce notes that the consumer statement etf is training below. 50 day, that's the blue. and it's 200 day, that's the

red. very few charters want to touch anything trading below these key measures s&p moving average is on the verge of crossing blow it's 200-day moving average which would mean the short-term trajectory is weaker than the long term. that's an extremely negative sign so negative, the technitions like to call it the death cross. i prefer to pick the stocks with companies of strong fundamentals, buying them into weakness to get bargains, at least for my travel trust, but it's very difficult to find a bad chart. it's doubly difficult to fight a death cross. based on what ponce's seeing here the consumer statement etf is in trouble trying to do

like -- like a skull and cross bones but i don't know it came out like hang man, you know. and don't forget this is not some individual stock, the s&p represents the entire secretato. it's the group you expect today badly, investors don't want to own slower growth food or package companies when you can buy something that's benefitting from an economic expansion what's driving down the xlp. some of the weaker consumer staples are -- we know the industry is uniquely difficult position, thanks to competition. including competition from amazon within the supermarket, the panty place like craft times they're taking over. consumer want natural organic. craft times likes velveeta that.

it's not what we want anymore. with that in mind, check out the daily chart of craft times this thing has been heading low since june and ponce points out the stock is making a see reese of higher highs and lower lows that death cross that i mentioned where the average goes below the 200, craft times made one of these at the beginning of august and it's rapidly sunk from 86 to 77. if you go back to last year, craft times made a double buyer pattern here and the stock launched from 80 bucks all the way back in '97. ponce says it's important, because the $80 mark is the floor. it's not encouraging that craft times broke through the floor last month when the stock first approached the 80 level, that balance faded in the stocks of '77

in short, ponce says it's an ugly chart, makes craft times not worth buying they pledge to not do any hostile deals and they need to keep doing deals to justify they're earnings no more left for them to buy, companies sworn off, it could go lower. why not take a look at the daily clarts and mils. general mils caught in a bear rick challenge and been tracked between its 200 day average for the entire year. general mils broke down below his level of $50 and change, i thought that was going to hold bearish, downward sloping trading range, no signs of easing up. the next point is not -- i have to say, it's not -- you may have to hide your eyes and younger

viewers i don't want you to see it all right, a chart of jm smucker. i know i'm sorry people have nightmares, use a night light tonight if you're seeing this. smuckers is a well run company but once again we see a bearish channel with a pattern of higher highs and lower lows the stock has lost roughly a third of its value these are some darn ugly clarts. markets laggers are important as its leaders in figuring out its direction. if you want a healthy bull market consumers like this are what you need to leave behind. the fact they're being sold indicates wall street is more confident about the future the charts isn't covered, ponce suggest that the food stocks could have more down side.

that's an essential component if the bull herd can continue to thunder. much more m.a.d. must be ahead including my take on next felix. can analyst and business data be easy some ceos just want to have fun and make you money in the process, you're not going to miss my brand new fun index. stick with cramer.

what the heck is going on

with the stock in netflix. the company reported numbers with blow out numbers. the stock -- before the opening this morning and it fizzles. the stock is down a buck 58, falling to $199.48 why can't netflix get any transaction after a quarter that was wide received that cost analyst to bulk the price up the stock has run up so much that, well, you know what, there was simply no way, you had to get some sort of sell off. let's get one thing straight, going into that quarter was nervous. there was so much height leading up to netflix's numbers. the stock has gone up 25% and we've been hit with a wave of bullish reports over the last couple of weeks with if you remember after firm -- firm after firm raising the cost -- i

should point out the pioneering work on this subject is well forgotten. here's the issue in a nutshell when everyone expects the number to be phenomenal it's difficult to blow people away no matter how complement the quarter is. this was a fabulous quarter, not perfect by really really great if you looked at the headline numbers, a small 3 cent earnings miss off of a small 2 cent basis. remember, netflix don't trade on earnings the key metric is the number of new subscribers that sign up the only people that want to earn these stocks are investors. they care about the revenue growth right now and more important the growth a year, two or three down the road on this important key metrics

netflix crushed -- the analyst were looking for 4.5 million subs these guys are killing it overseas, 4.5 million of these subs wen international in the words of mel brooks it's good to be the king. obviously, netflix is growing more overseas than here in the u.s. you all want the faster growing part of the company to be the biggest part of the company. beyond that, the subscriber numbers from this quarter were incredible, next quarter was even better. as i mentioned before earlier this month, netflix raised the price of its streaming plan a from $5.99 to $10.99 i've argued the streams service has become so essential, it

offers such terrific value that almost all pay a little more a month. so, sure enough netflix is confident the numbers are going to get better. for the fourth quarter management estimates it will pick up to more millions during the process to 6.3 million for example, the company only got it for 4.4 million new sign-ups this quarter they only beat that by 9,000 the fourth quarter was also pretty stellar management say they can earn more on the share. like i said, it wasn't perfect netflix still burning a lot of cash, something they believe they'll continue to do for years to come. ugly sweaters can't cover up

cringe where the caspar, they were wearing ugly sweaters at the time when they announced the stuff. netflix was forced to raise price target from $88 up to $93 for $200 stock. not everybody's thrilled about the fact the company's total stream about the obligation coming in 17 billion personally i don't mind all the spending on context. it makes perfect sense netflix has charged its growth on top of terrific like they "narcos, one, two and three" and "orange is the new black

kwtsz " /* -- the other as my squawk on the street pointed out this morning, netflix's long-term balance stands at billions given the cash flow is going to be negative for years to come they'll likely keep piling on debt but netflix is raise cash when it needs to because growth bars will pay for it disney may be ending their distribution deal at the end of 2017 he pointed out the river dale, the show on the w cnet work -- c w network saw -- between the two seasons, river dale debuted on netflix. the artist, directors and actress all love working for netflix because of the creative

freedom. here's the bottom line, netflix's stock may have sold off a bit today but they'll take that as an indictment of the quarter. stock only went down because so much going into earnings these declines tend not to last very long in this company if the stocks behind them are growing with weed. and the analyst who recommend it before will reiterate their buys bars will swarm back to the stock which i believe is worth a lot more than its market cap because the division, the artificial intelligence know what you want and netflix is one of the great bargains of our era. william in wisconsin >> caller: hey good afternoon jim. i'm warren green from wisconsin. thanks for having me on today. my question today is upgrade television net work. i brought it at its lowest

point. the old industry is going away streaming but for energy the position -- they felt local news and smaller markets targeting an older demographic. do you think i should wait for the third quarter -- >> take half off right now let the rest run, you got to do that tomorrow. don't like the way the group trades jeff in indiana. >> caller: thank you for taking my call. my son brad and i watch your show every day and we've been investigating together for a while now. we bought viacom in june of '34 we didn't know if it was time to price average down or sell and cut our losses >> i'll tell you the truth on any bounce i don't want you out of thing it's a true value trap if you have old stuff that doesn't need to be watched

instantly, no working. so my take is if you can get it back to 30 you'll want to go it's not ready for qualcomm. today's decline for you in netflix's quarter it was a blockbuster. much more "mad money" ahead. the future longs to ai it's artificial intelligence tonight on my private applier banking, i got a list of ceos that will help when i reveal my fun index. all your calls, rapid fire, tonight's edition of the "lightening round. stick with cramer.

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. i said it before i'll say it

again, the future longs to artificial intelligence. machines are going to conquer the world and -- humanity, sure it's a possibility at that point you'll have bigger things to worry about tan your stock portfolio. so, if you want to understand this market you need to understand ai, that's why tonight we're going off the tape to check in with thoughts -- with a company that makes the software they developed the first search engine, you can use thoughts spot an lisks platform to search through reems of data the same way you'd google search in english. you can just ask it questions in natural language so, let's check in with the

founder and ceo of thought spot who is one of founders of lieu tannics. get a clear sense of the artificial intelligence and his company, welcome to "mad money." good to see you sir. >> good to see you >> have a seat with thought spot search used to require 35 hours of analyst time, you get a single click, how is that possible >> one of the biggest issues facing our businesses, that is for every analyst there is 600 business users asking for reports and data breathing on their neck what we want to do is to liberate both of them. we want to liberate the analyst so they can do analysis as oppose to making -- we need to release the business viewers because they need to make business right now

two key technologies, search and ai combined. with search, people can ask the questions that have -- in a google-like fashion. >> in a google-like fashion and instantly get an answer right away for them. many times they don't know what question to ask. if you think about it, one of our customers they settle over 100,000 different types of diamonds if they want to understand how they're doing -- are they doing the pricing right, should they lay the diamond down into two or sell it as one there's so many possibilities of questions around that. with our ai technology we can generate thousand of questions based on what people have been searching for. people that are searching for a particular stock or person they know it's very very popular. >> let me stop you there for a second how do they know about thought spot and that it can do this for them >> we work with enterprises,

most of our companies are enterprises. we have customers in fortune 500. we get inside the enterprise and collect data sources and get exposed to all the business users. >> where does it fit in with oh tableau? >> that's a company that i have a lot of respect for 15 years ago they've been the most amazing visual technology we believe that the future belongs to faxes of data it really has a human scale problem. how do you bring data to a billion workers that are out there for those luke tableau and click. you still need an explored analyst to build a big cash board and it takes a week to do that

you need technology that can be used by an average user. >> we look chevron here, it's one of our favorite oil and gas companies. why does chevron hire thought spot >> we're working with she ever ron's hr department because they do a lot of things for their people and they want to understand which employee benefits are working well for them and what's not. and things like that where they should be hiring more and so on, how they should be doing, how they help people build their career they use thought spot to analyze all the data in a simple manner. an hr manager is not an analyst. >> well service now can do that no, or do you have to work with service now? this could be laid on top of any. >> those systems are systems of record >> last question, i started about talking about how terminator matrix, we're not as good as you, when are we going

to be replaced >> there's been a lot of discussion about ai taking over the world t machines will take over the world i don't describe to that view of the word i do think the key is going to be trust between man and machine. remember, this cycle is played every so often 100 years ago before we lost the car, first time people said monsters shouldn't be let out on the road but we have learned to coexist. similarlily, the humans really control the lines in which ai you have to drive and that is a key thing for thought spot every time we've been able to trust between the vehicle solution riding we allow our viewers to look into -- >> okay good no doom's day "mad money's" back after the break.

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right in the heart of the was in his financial crisis, and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor. it is time, it's time for "lightening round. play the sound, and the "lightening round's" over. are you ready.

time for the lightning round start with ben in connecticut. ben. >> caller: hey jim thank for taking my call >> of course ben >> caller: i'm looking at delta airlines what do you think >> stop looking start buying it's cheap steven in new jersey >> caller: thank you for having me on the show jim the stock i'm interested in is b bio teleme century >> i like the stock it's good. rob in colorado. >> caller: booyah jim. therapeutics >> the stock going up 375% it's too late. i can't live with recommends if i recommend at this level. douglas in california. >> caller: recently made an access of a power conductor

company, little fuse >> little fuse i like them omar in new york >> caller: hey what's going on jim? >> i don't know how about you? what's happening >> caller: good with the whole file from equifax is the same for the stock like tru >> no i don't think tru will get business it's a good company. >> don't forget to watch wilf interviewing wells gar koe, that's going to be fun linda in arizona >> caller: yes, jim, this is linda i'm a nurse here in -- i work in phoenix, arizona but i live in surprise arizona a couple of colleagues at work keep up with the stocks and about six months ago, someone came up to me and told me about eftr i did some research on it.

at that time it was going up really fast. >> yeah, i remember those days i'd rather be in mj, i think they've got a better product and don't need them. i'm not a believer in expert roe. mike >> baa booyah jim. i got some -- back in july >> yeah the stock's coming down i think it's a buy in. how about donnie in texas. >> caller: cramer. >> yo. >> caller: i appreciate what you do guy my stock is kinder morgan. >> there's some concerns there it maybe me nervous. and that ladies and gentlemen is the conclusion of the "lightening round. how'd that go?

he kept spelling my name with an 'i' but it's bryan with a 'y.' yeah, since birth. that drives me crazy. yes. it's on all your email. yes. they should know this? yeah. the guy was my brother-in-law. that's ridiculous. well, i happen to know some people. do they listen? what? they're amazing listeners. nice. guidance from professionals who take their time to get to know you. trust #1 doctor recommended dulcolax. use dulcolax tablets for gentle dependable relief. suppositories for relief in minutes. and dulcoease for comfortable relief of hard stools. dulcolax. designed for dependable relief. the strikingly designed impolexus nx turbore. and hybrid. lease the 2017 nx turbo for $299 a month for 36 months. experience amazing at your lexus dealer.

maybe we should have a full index. an index made up of companies where the executives seem to be enjoying themselves, happy to tell their stories on a conference call after earnings number one on the fun index no question that'll be investigatinetflix. amazon wish them luck but it's a lot harder to get the word out

to directors in hollywood that amazon seems to believer that's the first time i've heard anyone make light of amazon. they have to spend more than they're already shelling out because the time the right worried about alien adoption, no that's because netflix does a traditional call, doug from ups he has all the -- normally have a queue of analyst, ask me one related questions, one after another. might seem counter constitutive to you that you can learn more than what appears to be -- what's the point of being adver adversary y'all. can it be goofy. sure like the fact the

management team would be strange to dud from the department great for merchandise sales. can it be given high high per me sure some people went unchallenged but should have been given a rye post in general what i get is a vision of having 700 million viewers. the company can then raise if part because the movie theaters price their own shows for 10 or 16 a pop for one movie now, netflix's management is the really having fun on the job john ledger gets a kick out of being competition on that t-mobile call. he's playing old trash mouth coming in hot.

rob, from cancellation plans -- lots of tid bits and scatter through the narrative. elon musky throws a party. you get a sense musk is having a grand ole time, maybe too grand. i find it all putty in the universe but it's muddy entertainment. in good times and bad times clearly enjoys telling you what his company's trying to do i find him informative in the end i come back to netflix because the calls are inspiring for everyone who wants to think big no one's thinking bigger than these guys if we made people watch it in school there'll be more investors in the stock market than we have now even millennials i'm not asking for 100% vigor which can be the case with subject like insurance or

banking or even ibm which deserves to have a good time now and then i think a little fun in the proceedings and a word that lacks confidence the nice to hear in a ceo's voice every now and then if a stock gets hammered like netflix was today, you know you should find a weakness because as good of a time they had the stock at netflix is no laughing matter stick with cramer. understanding we're not in this alone, and teaching my kids that no ambition's out of reach. ambitions live everywhere. synchrony financial helps make them happen with data, insights, financing and technologies. ♪ ♪ synchrony financial. what are you working forward to?

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ibm's getting closer and closer to turning around that declining revenue stream i think land research is trichk but we had big profit taking last time after it went up and it could happen again. so, i've been saying exercise caution. i'd like to say there's a market somewhere i promise i'd find it for you here on "mad money." i'm jim cramer and i will see you tomorrow sesame, chocolate c,

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