your birthday. happy birthday all right. >> i'm going to sell off >> i'm melissa lee thanks so much for watching. see you tomorrow again at 5:00 for more "fast." "m meywi t o aadon" thhenend only jim cramer starts now. one and only jim cramer starts right now. my mission is simple, to make you money i'm here to level the playing field for all investors. there is always a bull market somewhere and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. i'm just trying to make you some money. my job is not just to entain you but to educate you is fang dead has fang died? i don't mean to be glib. i just wanted to get in front of

tomorrow's story line because after the fang stocks declined today, you better believe the obituary is being written again right now. with two as and two ns facebook, apple, net fix, nvidia or goggle, the company now known as alphabet. any weakness in fang is worth taking seriously, of course, especially on a down day like this the dow declined 37 points the nasdaq lost 0.44%. these periodic pull backs. so that way you can try to figure out whether it's worth tearing your hair out some more. maybe sell first, let's take it from the top down or what's known as the macro for those who want to sound really smart we have higher interest rates. bonds sold off that gives you higher rates which i think is a consequence

of the economy doing better, not to mention the tax bill that could really make thingsheat up when you consider the big hole this puts in the deficit, you know the government is going to have to borrow a lot of money, meaning there will be a hurj influx of supply in the bond market the government's got to pay its bills, doesn't it? when uncle sam pushes a lot of bonds, that pushes the price down which by definition drives interest rates up. a flat yield curve, short rates set by the fed and long-term rates set by the market are roughly the same it's often an arbinger of recession. but with the government boring this much money, loan rates are going higher no need to fear an inflated yield curve if you ask me. i want banks to lend more. lending has been punk, but if long-term rates go higher, making loans will summed get

more profitable, giving bavgs a real incentive to lend there are consequences here. when we see rates go higher, we immediately think inflation. normally the two go hand-in-hand the value of any future earnings stream diminishes. given that the fang stocks represent big bets on the future of earnings high growth companies, future earnings stream, inflation's real bad for them so their stocks sell off when rates go up let me simply it, higher rates lead to lower prices and fang be the king of the juice. worse, when the economy's humming, investors lose interest in what's known as secular growth stories like this in this virmt, the industrials can give you much larger year over year gains because their numbers are accelerating so rapidly. stocks go higher when they beat the earning estimates. the bigger the beat, the better. with the economy roaring, the industrials should versus the

secular growth stocks blow away the numbers, particularly now that we're getting a boost from the tax cut. fang's numbers will likely be just as good as they always are. none better, none worse, with the industrials catching fire, fang's numbers should be less impressive than the beats i'm expecting from the smoke stack companies. took me about 100 pages for explain what i just explained to you. remember, i'm not saying you should sell facebook, apple, amazon, netflix, nvidia and alphabet tomorrow morning, they're going to do it i'm giving you the bare case so you know what you're up against and don't panic. when the stocks get slammed, maybe you'll even buy some let's deal with the components first, i'm hearing that facebook will simply do the number and not much more than that because there is no acceleration or product that is taking the world by storm it's become same old same old.

that's not enough to the market. that's really the rap against facebook, other than the fact that twitter might be doing better that's not a lot of worry but it's enough. amazon, okay, today walmart caught on upgrade that talked about how the company is figuring out the omni channel. if that's the case, you an argue they're in a much better position to go toe-to-toe with the online closus. the death star is not inflicting a lot of pain. even best buy's doing well, for heaven's sake. i think amazon is fabulous, especially its red hot web serves business. i say if we get any real weakness, i'll pound the table that said, you know what's describing the stock down. apple just caught a downgrade saying the iphone supercircle is getting long in the tooth. i don't know, i mean, how many times have we heard this my reaction, look, you may be tempted to sell it here and try to buy it back at lower levels i don't know if i would get that right. i don't know i think that's a fool's errand

i say own apple, don't trade it. every trading call to get out of apple has been wrong this piece did not change my mind even when the piece said at one point this is -- it's just happened over and over again i remember when the apple 5 ended there was a big selloff. how did you do if you sold after the apple 5? people aren't good enough to get back in. netflix, this decline is all about disney it's putting together a rival to netflix. this is a tough one, i have to admit. i always think, though, what would it take to duplicate netflix's business i think it would cost more than the company's current $80 billion valuation. that said, i will concede it is definitely the most vulnerable of the fangs what's the problem nvidia? it's one of the most expensive stocks in the world. it's one of the dominant chip

companies when it comes to servers, gaming, autonomous cars and artificial intelligence. not by micron. look, nvidia, the stock has periodic swoons. and this one has lasted a long time ever since the company reported i believe it's digesting a big move and this stock, like the other fangs, is simply the victim of a rotation i'm not pafrpging and nvidia, i don't think you should either. alphabet, the company formerly known as google. gain market share and about $100 billion in cash to fall back on. that's a nice cushion. it has a web service that is doing well, not goods as amazon. i would not be a seller. my -- as well as the stocks of apple, nvidia and facebook we believe in high growth. so could this be the end of fang look, people pronounce these stocks dead so many times.

it's just an endless headline. so you've got to wonder how they've managed to survive at all, let alone thrive. but i'll tell you that in all my years in the business, we've seen super growth stocks go in and out of favor, however, there is nothing wrong with the underlying companies you have to wait until their stocks come down and you're given one more chance to buy them that could be happening now. now, look, i understand owning fang can be painful. but if you look back say at apple stock, for example, how many times would you have bought high and sold low over the years if you let this stuff freak you out? here's the bottom line, don't let some analyst downgrader or rotation of high growth scare you away from buying fang. the one time i wrote obituaries for a living, but i never wrote a premature one. until i see a corner support

from facebook, apple, amazon, netflix, nvidia and alphabet, i think we need to presume that these stories remain very much alive. can we go to paul in florida, please paul >> hi, jim thanks for taking my call. and a big booyah from pensacola, florida. >> let's go fishing. >> oh, yeah. let's do it. >> what's happening? >> i really enjoy your show. >> thank you. >> thanks for all the great information you provide for the little guy game stop, symbol g & e. they have increased their dividends in even of the last four years but the stock seems to remain in a steady decline >> it's a digital business now the stocks are under pressure, the business isn't the physical gaming stuff, i keep hoping that the stock will get to some level it's cheap enough to recommend but i've not found that level yet thank you for the kind comments.

i try to help everybody, which includes the little guy. we're all kind of little when you think about it thomas in alabama. thomas >> caller: thanks for taking my call, jim. i'm a first-time caller but i routinely listen to your program. >> thank you >> caller: i've made several investments overs years and one in particular back in january i bought some general electric based on your recommendation it was selling for $32.75 a share. it kind of gradually went down and came up and then about six months ago, i think it was on the the show, a caller called in and you recommended holding on to it. it was going to boom back up since then, it's gone back down. i think it's $17.59 a share. ge is a good company they've got different projects going on all over, aviation -- >> true. but, thomas, sometimes you just get had and i got had.

i was wrong about ge that's my fault. i shouldn't have recommended it on the way down. i thought business was doing better why did i think that because management told me that. did management know something i didn't know? i don't think so i think they got snookered too, but, you know what, we've got a new guy in town, flanery, i think he's trying to get it together so i would not sell it, but i cost people money because i believed and i'm ashamed i don't think there's more to say than that. fang's not dead. facebook, apple, amazon, netflix, nvidia and google are very much alive. on "mad" money tonight, some of my best ideas come from you. the latest company you've clued me into, it's up nearly 50% year to date. i'll reveal the name just ahead. then has bitcoin started to replace gold as the place to store value? i'm going off the charts to find out. and a company that is bringing the bomb market into the digital age.

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i'm always telling you that we here at "mad money" strive to be the most interactive show on television why do we do that? because i'm a nice guy who wants to be responsive to your concerns but there is another component, too. it's a form of crowdsourcing every now and then our callers will unearth fabulous stocks most of our viewers have great horse sense. which brings me to penumbra. this is a medical device company i got clued into because of a call from collins in south carolina 13 months ago then i got another call from sarah in new jersey back in

february both times i decided to circle back and do more homework. my verdict, i gave you my blessing to buy penumbra but recommended you wait for a better entry point before buying it hand overfist i know when i do that it upset people why don't you come out and say buy it there is one problem here, and you're right, penumbra hasn't given you many entry points. it was 82 when i circled back in march and surged all the way to 116 last month penumbra has finally given you that long awaited pullback the shares are now down 20% from the november highs and people are getting nervous. so given that it's an audience name that's made some of our viewers a lot of money, i think we've got to figure out whether we're doing with a buyable dip or if this is the beginning of a larger decline it's not always easy to tell

first of all, let me give you some background here penumbra is a company focused on making devices that help treat patients with naur owe vascular conditions i want you to think an russ mitchells and stroke victims this is breakthrough stuff their products allow doctors to perform minimally invasive procedures to remove blood clots that might be blocking circulation in a patient's brain. this is a big deal and it's not just the brain, penumbra's devices can remove clots in your peripheral vascular system, all the veins and arteries in your extremities, it's amazing. -- i wanted to wait but you only caught a modest downturn before the stock started roaring again. second time, let me circle back, i mentioned march of 82. i said go ahead and speculate on it but again i put that darn caveat, wait for a pullback and again the darn thing took off like a rocket.

that is still the big selloff from 116 down to 93 over the past few weeks so what the heck's going on here okay one of the reasons i like penumbra and probably why i kept getting calls about it, the company gave you a fabulous winning streak of much better than expected quarters reminds me of that stock out of israel you got a beat after a beat after a beat after a beat with penumbra that's how you get such a relentless rally remember when i said at the top shoeft it's beating estimates that matter. the streak was broken, though, when penumbra reported in may it delivered a larger than expected earnings loss and reported again in early august, another wider than expected loss this didn't seem to phase the analyst community or the shareholders penumbra wasn't an earnings story. it's a rapidly expanding medical device company that is all about

revenue growth one advertisemenalyst said don' penumbra, just own it. i think he confused it with apple. like i said, though, the real mil mix-up is revenue. sure the revenue growth has slowed down last year from 40% to the mid-20s, but that's the law of large numbers penumbra did a 1.3 secondary share offering in match. it didn't matter stock rallied 6.3% the next day. that's a good side they had to recall the 3d stint retriever, but hardly anyone seemed to notice they told a good story in september, the presentation was well-received, stock continued to rally and that was the setup going into penumbra's third-quarter earnings report six weeks ago. once again, they gave you a nice top line beat with revenue growth accelerating to 29.9% they earned a penny better per

share when wall street was looking for a 6 cent loss. they earned a penny, they didn't lose management raised their full year sales forecast. sure enough the stock spiked in response, surged from 103 to 1113 then going to 115 and change the day after that, this thing was hot as a pistol, but that's where penumbra peaked. suddenly the stock hit a wall and reversed you know what the worst part is? sometimes you've got to own this i can't really tell you why it went down. to my admittedly unrefined eye, all of the news seems to have been good news that's obviously not how the market saw things. first big slide came on november 10th, an 8.% decline right after the post-earnings rally. let's call that profit taking. i always tell you no one ever got hurt taking a profit the very next day, though, "the

new england journal of medicine," incredibly influential publication published the results conducted by striker, one of penumbra's competitors. the takeaway, okay, the general consensus in the medical community has been that when someone has a stroke, you need to remove the blood clot within the first six hours, after that the damage has already been done striker's study showed stroke victims could benefit having it removed up to 24 hours after the stroke in short, there should be more demand for machines made by striker as well as penumbra. it's good news for anyone who is in the business of removing dangerous blood clots from people's brains. while penumbra's stock initially rallied in response, within days it had guchb up those gains and kept sliding analysts at bmo downgraded penumbra from outperform to market perform that's wall street's peak from taking it from a vital hold.

the seem team at bmo drastically raised their price target for the stock after the company reported its fabulous results last month, when the stock was ten points higher than when they downgraded rational for the downgrade, valuation. fair enough. it's not exactly chief if the valuation is so stretched, why do these guys like it at higher levels simple they liked it when it seemed to be going up and i think they stopped liking it when it seemed to be going down look, penumbra is a textbook example of what happens when growth investors decide to declare victory and move on to greener pastures some of the recent selloff makes sense. penumbra won't really benefit from the big tax cut as i said, a lot of stocks that i mentioned at the beginning of the show that aren't going to benefit that are high growth like this. most of it is because the stock started declining and then a lot of weak-handed investors panicked and they were selling their whole positions.

i described at the top of the show, you got everything getting hammered the bottom line, i've been telling you to watch out for a pullback in penumbra since last year am i going to run from it now that we got one? penumbra, i think it's a broken stock, not a broken company, and the name by a name of larry beagle skn beagleson remains bullish. so am i. those who like these high-growth superstocks, i take it much more "mad money." tonight with bitcoin bursting on to the scene does an investment in gold or cryptocurrencies make more sense in this market i'm sitting down with the man with the revolution in the bond market with the ceo of market access. and why breakouts could be the new normal in this market. stick with cramer.

what's critical thinking like? a basketball costs $14. what's team spirit worth? (cheers) what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley

you ask, i deliver has bitcoin started to replace gold as a repository of value? a place for rich people to hide their money when they get worried on inflation or government confiscation? the recent decline in the precious metal and the run in bitcoin, this idea keeps popping up does it have any merit will they really replace gold as the favored alternative to actual currency? it's an important question, which is why tonight we're going off the charts with the help of carly garner, a brilliant technician who is the co-dpounder of carly trading, the author of high probability trading. long story short, bitcoin is not going to replace gold any time soon i'd say that even if it hadn't started pulling back as garner explained, it was

created as an experimental currency that would let users move money around the web anonymously. it was never intended to be an investment vehicle once more, bitcoin's not backed by anything tangible if heaven forbid so global claim strikes and the power goes out, you may not be able to access the digital currency you don't need to take it that far. we're constantly hearing stories about people losing their cryptocurrencies investments to hackers or simply because they forgot their password. put it all together and gasher believes the astronomical value is perception not reality. you know how i feel about bitcoin, if you understand the risks, be my guest, buy. if you might argue that gold only has value because of perception, too. the precious metal is still good for something. it can make shiny jewelry. it's a great conductor, which is why it's used in -- for

thousands of years more important, garner points out that the gold market is extremely deep you've got millions of investors owning everything from bullion to coin toss jewelry and they all hold ismall piece of the pie. the gold market is said to total $2.4 trillion with a "t. the current cryptocurrencies market is $2.6 billion and bitcoin makes up more than half of that there is a wide -- that huge swaths are dominated by maybe 1,000 players. someone could skew the action here the idea that gold's recent weakness stems from bitcoin's strength garner's skeptical. what's really going on there when gold pulled back below 11 ks $250, that was the fourth time it dropped below $1,250 more than that, garner thinks the precious metal could be poised to go higher here

check out this historical chart of gold that averages the action over the past 15 years we typically get hit with a decline in early december. there we go. which then gets met by buying, leading to a nice run that tends to last until march. if that seasonal pattern holds up, garner says you should be buying the dips in gold, not freaking out about its relationship to cryptocurrencies shows the commodity futures trading commitment of traders. garner loves this data because it tells you what spectators, money managers, small speculators, the pattern here, garner noticed when the net long position falls to along 100,000 contracts, the precious metal tends to find a bottom at the moment, it's almost at 100,000, which means we could have -- we have a little more downside or maybe gold already bottomed last week see, take a look at that

it's pretty dispositive when you think about it or consider the weekly chart of the dollar index, which measures the u.s. dollar against a basket of currencies. when the dollar goes down, gold goes up. while this correlation has been weaker in 2017, the fact is the dollar is on the decline garner thinks the dollar index is headed to 90. the last time it was here, gold was trading at $1,350. up nearly $90 from where it's currently trading. this is incredibly important, i too feel the dollar is going to go down. a lot of people feel this is a move that's going to go here i think she's right about this let's go to the weekly chart of gold futures itself. a decade-long period where the precious metal could do no wrong. then in 2013 it collapsed and ever since then it's struggled to make a comeback caught between $1,000 and

$1,400 however, within the range, we've seen some motional peaks and troughs. whenever the gold bulls are loudest, it types to get hit with selling when it seems ascendant, the buyers step in the more we hear bitcoin is bearish for gold, the more people say the shiny stuff is being replaced as a reposetory for the world's weather. is about to find some upsize from these levels. take a look at the slowest indicator down at the bottom here this is a tool that helps measure when an asset got too overbought or sold it's stunning how accurate this thing is, okay of the last ten occasions when the oscillator has shown oversold readings, nine of them ended up giving you a rally. this is really kind of amazing nine nine of ten. that said, the one time it didn't work was back in early

2013 and it ended up being an utter disaster for anybody who bought the dip you have to be careful you can't be blind to this the gold is once again in oversold territory i like the odds. it's right where it should bounce not bad, huh i like that. what is else garner noticed it has two floors of support one at 1,235 and one at 1,200. she expects those numbers will hold if we get another downswing. she shes gold running up to 1,350 before it hits a ceiling of resistance. then it's 1,420s in the cards. she thinks we could go to 1,485 in the event of some major unforeseen news. in the end, gold has experienced multiple slumps in recent years and every time it's managed to bounce back. garner thinks the bitcoin-related worries will play out the same way, although we may revisit the 1,200 level

before the rally kicks in. there are caveats. if garner's wrong and gold breaks down below 1,200, the bears my take it all the way down to 1,100. it could go as low as the 985, however, she thinks the odds of that is very slim. even after the cryptocurrencies substantially declined over the last couple of days, gold is not being supplanted by bitcoin as the alternative go-to. suggests that gold might be ready to make a comeback while i won't discourage anyone from buying bitcoin, just know the risks, know your limitations. i'm with carly when it comes to the precious metal, not the precious key stroke. i want to go to george in new mexico george >> caller: how are you doing two questions. fun questions, kind of they're both regarding a possible war with north korea. question number one, if i had $10,000 worth of gld, how much

could i expect that to appreciate in the event of a war? question number two, what's going to happen to the cryptocurrencies do you think people are going to run in or run out? >> these are hard. these are hard questions i would expect gold to jump maybe as much as 10% i think the cryptocurrencies will actually there will be people all offer the world in areas that are let's say concerned about governments toppling, i think they'll buy bitcoin. so it will probably drive both of them up, which will be unusual. but there's enough money to go around let's go to blake in connecticut. blake? >> caller: hey, jim. thanks for taking the call big booyah roger williams university alum >> what's up >> caller: i had a good question trying to get in on this big

crypto wave, looking at ripple, trying to make ten times the money. my concerns are the security is it secure to purchase other koi coins to exchange them for ripple >> i would feel better about bitcoin, but, you know, also, i'm not an expert on this. i like to admit when i'm not an expert it's just better that way. i'm a stock guy. i know my own limitations. i'm like clint magnum force, where they have a police force within a police force. is it all that glitter's gold? i don't think so despite its exciting run, bitcoin has not replaced the precious metal much more "mad money" including my exclusive of a company up nearly 500% over the past five years. don't miss my exclusive with the ceo of market access to see if the move can continue. when you wake up with a breakout, you might be disappointed

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even an old idea can be

revolutionary when applied to a new context. someone should put up that on a fortune cookie in the stock market, electronic trading platforms have been around for years there is nothing special about signing into e*trade to buy and sell stocks. every time a company or government issues bonds, they're creating a whole new security, which means you have lots of different products but even one has far fewer holders than a big liquid stock that can make liquidity hard to come by and without liquidity, it's hard to trait electronically which brings me to market access, an electronic trading platform trying to make the bond market more liquid, thus making the whole experience more simple for traders and making more money for the client fixed income investors with a marketplace not controlled by the big wall street firms. if what i said put you to sleep, give me a break. stock is up 37% year to date

talking about a 32% gain last year the most recent quarter is very strong let's take a closer look with the found? chairman and ceo of market access. get a better sense of how this company is transforming the bond market welcome to "mad money. good to see you. >> thank you, jim. >> you're one of these guys everyone tells me when are you going to have him on i'm thrilled you're here a lot of our viewers are not bond traders, perhaps what you can do first is introduce our audience to what you guys do and why it's so important because it really is revolutionary from when i was in the business. >> great thank you. we are a fin tech company and we build technology solutions for the institutional bond markets and run an electronic marketplace that is adding efficiency and reducing transaction costs for the global bond markets >> how does that necessarily provide the other side of the trade, so to speak, if i have a security that is not trading at much

>> well, it's a fact in the bond markets that turnover is a lot lower than what you're used to in the equity markets, but we've done that by creating the broadest liquidity pool available in the global bond markets with a network that now includes 150 dealers and over 1,100 institutional investor firms that can trade together on the market access network. >> people are going to say the stock's done very well but how do you guys make your money if you're a kind of a go between? >> we make our money through the transaction fees that take place on our system. it's really a volume-based game. as more and more share of the market starts to move electronic, our volumes go up, we earn transaction fees, that describes our revenue growth. >> okay. one of the things that i think this sounds like to me and you are basically digitizing the bond market. >> the it's as simple as that, jim. we've created a marketplace that makes it much easier to trade bonds. we promote price transparency,

greater competition, better bond choice more trading opportunities on the market and all the while driving down transaction costs. >> okay. how about if i have bonds from an emerging market, do you do those, too >> we absolutely do. we've really focused on the hardest markets to move trofr electronic. >> okay. >> when we started the company 18 years ago, government bones started to move trochelectronic our primary markets are investment grade corporate bonds, high yield and emerging market debt. >> could you ever, because this is on everybody's minds, could you ever if you decided tomorrow to make a bitcoin exchange >> it's not really in our wheel house. >> it's not a bond market. >> so i think it's better suited for the exchanges that trade for an exchange in other more liquid markets. >> okay. so give me the -- what do you think is the health of the market right now you know, today interest rates went up. is it -- is it a bubble?

>> yes. >> there is such low yields. i never tell people to buy bonds. >> yes, i think 2018 is going to be a really interesting year for the bond markets. >> okay. >> quite frankly, we've been growing in spite of the fact that we've been living in this very low-yield, low-volatility environment. as you know, we've been through unprecedented monetary easing and quantitative easing with massive amounts of balance sheet expansion by the fed, the ecb and the banks of japan driving rates down to help spur economic growth. but the short answer is that has worked we're now seeing better global growth numbers than we've seen since the crisis central banks are starting to reverse those policies rates are starting to rise we have a lot of debt out there. corporate bond debt is about double what it was eight years ago because of the issuance environment for corporate treasurers i think it's going to be an interesting year as rates start to rise and normalize over the

coming quarters. >> one last question, we heard from the big brokerage houses that fixed income is not doing that well because there is is not a lot of volatility. what are they doing wrong that you're doing >> sours not a volatility or trading business it's how can we move market share trading by television to a more efficient global electronic marketplace, and even year there is more share heading in that market in our largest market the estimates are only about 20% of that market is electronic today. when you look at emerging market debt and high-yield debt, it's 8 or 9%. we think we have much more to come. >> it's a great story. for those who used to trade bonds, get guys on the phone to get six different offers you know what it was like. it's terrible. you're solving that problem. mktx, they are providing a real service. mad money is back after the break.

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round. and then the lightning round is over are you ready? it's time for the lightning round. start with conner in texas conner >> caller: hey, jim, thanks for taking my call. >> you bet >> i'm calling about isrg. >> the stock's been a little droop of late, but that's okay because this stock has so often done this and this pullback is viable i need to go to bob in new york. bob? >> caller: yes, big booyah, jim. i wanted to ask you about allergan going forward. >> it's been crushing me it drives me crazy i'm taking the whip and whipping myself lots lately on this one i'm sticking with it i tell club members i know i've been wrong but i'm sticking with it let's go to randy in florida randy? >> caller: booyah, cramer. randy here from weston, florida.

fly, eagles, fly, baby all the way. i hope let's just hope. got a question for you, want to know what to do with a little bit of some cvs stock? >> i think vcvs is at the bottom end of the range i'm staying with it down here. let's go to josh in washington, d.c. josh >> caller: hey this is jim from washington, d.c. at the university of maryland booyah >> indeed. what's up? >> caller: i'm calling about paycom software. crushes earnings by at least 10%. i'm wondering where you think you can go, i know this growth can'tlast forever. >> it's up 81% bulls make money, bears make money, pigs get slaughtered. i want you to take out your cost basis and let the rest run i'm going to bob to new york bob? >> caller: hi, jim, how are you

doing? >> i'm doing well. thank you for asking how about you? >> caller: doing well. getting cold in upstate new york i'm wondering about huntsman. >> i like it they're working. so is lionel basil they're working. i've got to stick with it. that, ladies and gentlemen, is the conclusion of the lightning round. the lightning round is sponsored by td ameritrade there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

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traders are creatures of habit. they respect ranges. they know when stocks are stuck in a range and they can't go any higher or at least until this particular market that's what they thought they knew now no two markets are alike, but this current one reminds me of something we've been through before, both in the mid-1980s and 1990s, we experienced markets just like this and they were extremely indim dating to traders because of the incredible amount of power behind what we call breakout moves. we didn't get to dow 2,400 by slogging slowly through the wilderness we soared through the air. take the forward pass of the stock of caterpillar cat hung in at 130s after massive upside surprise. the smart thing was to sell it at the top of the range and buy it back as it got hit at the bottom all the while thinking the stock would have to retrace at least half of that magnificent move.

that what the old way of thinking next thing you know, cat's in the 140s, blasting off the range and a couple of good monthly numbers and that's it. it bursts out from the line and then it makes the previous range look like history. we've seen this pattern many times in the last few months it creates a surreal pattern for traders. they can't get over the idea that norfolk southern's stock has rallied so much. they can't understand the handle, the price right where right at the front of it they're looking at 120 and can't believe it's suddenly going to 140 and they don't like it it's hard to comprehend. boeing is the best example it lifts every day, sometimes by one or two points and people say, oh, yeah, i told it at 270. to understand moves like this all we have to do is study history. history is actually on the side of the bulls take the 1980s, back then stocks like coca-cola, merck, bris

stole meyers were ever blowing through these ranges the remember "businessweek" cover how coca-cola could have a bigger market cap than general motors no one believed they could surge past their top level trading ranges they kept roaring higher these guys didn't bend metal, they simply produced sugar water and pills. we saw how that came out, industrial america passed the torch to soft goods for good it would never be the same afterwards never. we saw something similar in the 1990s when it was hard to believe how tech exploded. first with the pc and then through the internet tore through price profits like a knife through cream cheese analysts were forced to raise their goals furiously just to keep up with the stocks. it's like that again, but boeing, caterpillar, united technologies and the banks i know many analysts new to the

business might question my rigor. many traders would argue it's not natural for dollartree to have such an insane move they puzzle about j.p. morgan could break out above 100 or how bank of america could soon fall through 130 respectively you think that the traders would have figured it out by now this is no ordinary market, people, but they keep thinking in such limited terms. the same way their predecessors watched helplessly as coke and merck captivated buyers in the '80s they've been conditioned to believe these kinds of breakouts are meant to be bet against. it's what i'm calling the range skepticism that keeps so many traders on the sidelines from making them short every rip. that had been such a great strategist now shortening the rips say terrible mistake our confusion about all of this, of course, is made deeper because all of the hedge funds,

letters and announcers told us we have to worry about the market heading south and then, wow, they sold this, they sold that so many smart people were flat-out fooled yet we kept taking them seriously. i say get used to the breakouts. they are to use a despicable term that hedge fund managers like to toss around, the new normal stick with cramer. ♪ (music plays throughout) ♪ ♪ ♪ ♪ ♪ [vo] when it comes to investing,

looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.

two of my absolute favorite stocks reported great numbers today, carnival cruise and darden, darden, of course, is olive garden carnival cruise, the big ship company. you know what, people are still going on cruises because it's experiential that's where they take their pictures and rebrand darden, olive garden represents wasn't of the greatest markets known to man i'm jim cramer and i will see you tomorrow

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