cisco. i think that stock is going higher >> i'm melissa lee don't go anywhere. "mad money" with jim cramer starts right now d my mission is simple, to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to make you some money. my job is not just to entertain but to educate and teach so call me at 1-800-743-cnbc or tweet me @jimcramer. when the obvious strikes, you need to have a plan.

today the obvious, a polished new fed chief went to clapitol hill and yet stocks just cratered dow sinking and s&p falling and nasdaq losing. did powell somehow lose his first appearance no a remarkable run since the bottom if powell is not the culprit, what is it the bond market. they tumble. when the ten-year goes to 2.8%, the vix declines and be the house rallies. in any other environment i wouldn't bother mentioning the

volatility index the vix acts as an accelerant. when the yield climbed high today. stocks rolled over you know what, after listening to warren buffett yesterday, i want to inject some common sense light into the dark situation. when the economy gets hot, a responsible fed chairman needs to talk about raising rates in order to tamp down potential inflation. so far pow well is doing everything right there is a wide set perception 3% is the reason to sell while 2.8% is the reason to buy. that in a word is ridiculous as buffet reminded us yesterday, stocks more valuable than bonds.

buffet understands the stock as an asset class is cheap compared to bonds right now when he thinks bonds are the better bargain, he buys bonds. but that won't be the case any time soon, he just told us that. we tend to be in horse race mode and that is not helpful. here is something you might not know i used to dig ponies paid my way through harvard law. waiting at the rabbits the next term, what can i say? back and forth, back and forth final at home stretch.

just exhilarating. the fate of the whole stock market depends on which one wins and which one places but when we play the ponies, call it gambling, minute differences in time down to the wire, down to the nose, they actually do matter, it is zero sum. you lose your whole wager and we call them rip-ups, that is not how this works in the real world. i would like to leave that horse race commentary on the track if powell thinks we need four hikes because the economy is so hot, we'll get them. tightening may be a decent parlor game, but warren buffett says, it is not much more than that his words still ring true

24 hours later sure we have thorough bred stocks and maden claimers. the racing commentary i hear often it does one thing and only one thing. it makes you feel like you need to bet on a new horse each time. ten races a session. i like to step back and say, wait, you know what, we'll let the horse race play out and see what the gamblers get us i see it as a chance for reflection finally we may have an opportunity to see the individual names that come down. we have been watching broad com one of the premier semiconductors of our age tries to buy qualcomm.

for all i know they might at the right price vote to turn the do over today, it took a similar path with attempt to acquire a thing called sky, a satellite company. they have been trying to by the rest with a bid on the table as part of a fox larger deal with disney many perm mentation to these mac nations. what matters to us is that co comcast stock is worth less than yesterday. i told dlclub members that, but comcast is a proven winner they are not going to abandon it now.

disney is another fave and it too got clobbered give up on having it all together this whole fox issues becomes more expensive for disney. disney is still a fabulous story with or without the british satellite tea business and most importantly, where should we be bargain hunting in the wake of today's sell off i spent the whole day pondering this question. the financials, the tax and defense stocks they didn't come down to levels that i find attractive, but the drugs and the oils and consumer package goods base they fell harder but they aren't more attractive than they were yesterday or the

day before, they remain two expensive give the risk. neogee resources broke down. in short, as much as wiant to say, this is was a consequential session with notable declines, i didn't see any when i learned to handicap, the most important lesson i received and he was taught by the best, is that in on some days, there were simply no races worth betting on none that made sense to go to the window and plunk down hard-earned bucks. no anomalies the bottom line 40 years since i

had a good stogie outside the paddock or the finished line you just needed to sit on your hands and wait for another day, another chance, a better opportunity. sometimes that's all there is to it let's go to addelaid in alabama. >> caller: thank you for spreading. >> it is the whole gang. i think about it every single day. >> caller: i read in your book get rich carefully and i bought southwest airlines in '09 and kept it over the years. i know you have concerned about the airline industry and the resurgence of competition and possible price wars but i feel

like southwest is a buy down here. >> i have been spending a lot of times thinking about warren buffett and he was talking about buying a whole airline you buy love luv is not for sell. gary kelly is the ceo and has done well. i would own the stock here and buy more if it fwogoes lower today was gloomy but nothing at attractive levels just yet sometimes it is best to let the horse races play out one and just ignitesed the rest of the tech record way fair's tag line is a zillion things at home does the company still have the

potential? when it comes to the market's reseent sell off, is there a lot more blame to go around? stick with cramer. >> 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 you might take something for your heart... or joints. head to madmoney.cnbc.com. in drug stores nationwide. prevagen. the name to remember.

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wayfa . >> sometimes a really good quarter will sneak up on you when the company in question gets some of the credit it deserves sometimes it is not enough that is how i feel about the numbers of hpinc better performance on already a

superb day sounds like a good quarter there is so much more to this story which is why i think the stock has more room to run let me unpack what is happening of this large company. first of all, remember that when the old hewlett-packard broke itself up splitting in 2015. wall street viewed hp as a total dog. pc was supposed to be dead and nobody cares about printer anymore. nearly everyone expected this to be a growth challenge company with a solid dividend and it wasn't the one people wanted they wanted the other. hp is giving you double digits

in growth. undisputed leader. controlling 23% of the market up 170 basis points from last year. that is staggering it almost makes me feel like we are back in the '90s when haout packard and dell ran the universe this amazing quarter was up a tough comparison it is just, it is not just about run of the mill personal computers. the company's personal division is showing growth. and designer on the coolest games is doing quite well. notebooks, 14% te desk tops up 17%. and remember everyone was

excited about 3d printers, hp is in full production of machines and it is going like wildfire, once you have been making enough products, buying a 3d printer is cheaper than doing it old fashion tools. hp is the leader when it comes to commercial production how has hp turned itself into a consistent grower? as was told in the call, if you look at the personal computer five years ago, probably unrecognizable of the products we make today. pointing out the old pcs are ugly i can attest to that i love my elite book with the elite core 17 pro. it bends

it let's you scroll up and down by touch screen. i love it when it can do that. it is so, so exciting. what an amazing feeling that is. the resolution is gorgeous and yet it is both light and strong. the darn thing gives amy apple a run for its money. the analyst are more focused on the gross market why isn't it working more for them here is the take away. it is something that helped the tech cohort last week. raw costs one of the basic building blocks of personal computers are going higher which have been much stronger for longer than anyone i know expected would level off i figured they would go from head wind to tail wind that is a remarkable change in stance and why the stock of

micron, the d maker has been surging. makes me better to buying the stock of micron. that priced earnings multiple suggests more investors believe the estimates have to come down. but it doesn't feel that way if you listen to the hp call. they think flash strivdrives are going to be strong but the company didn't buy it. places like gam our surge and applied materials. these stocks are getting cheaper. finally cell phones versus pc. we see the mobile phone industry, we see the mobile under pressure

that is crucial because so many text stocks feel like they have been held back by the slowing of the cell phone market. you need to think outside of the cell phone box those pondering the zero pun nation one last thing hewlett-packa hewlett-packa hewlett-packa hewlett-packard hewlett-packard enterprise now former ceo meg whitman left her successor with everything he needs to make it worked. as he says, he has the right strategy now it has been a tough slog for hp since the break up.

now both parts seem to be firing on all sill ldil cylinders and the internet of things are where the action is. which is why hp. we salute you for all you have done for hewlett-packard shareholders my take on wayfair and i am taking a look at a big picture when it comes to the market's recent blow up when i go off the charts. and i will tell you what to make of macy's move higher today.

stick with cramer.

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now that we're no longer being preempted by the olympics every night, it is time to play catch up starting with the stunning stories in the past couple of weeks. i am talking about stories like the jaw-dropping collapse of wayfair. wayfair, the online furniture kingpin. when i went to italy, wayfair was flying high. red hot stock. then last thursday morning, wayfair reported a sub optimal quarter and the darn thing just gets crushed losing 22% of its value that day ouch still the stock had run so much in recent months and even after this catastrophic decline,

wayfair was going back to where it was trading in mid-december so left with two questions what in the world happened to wayfair and could the stock be worth buying down at these levels or is it too toxic to touch? first let me set the scene this is one of the most controversial stocks i have ever seen. wayfair is the largest online furniture retailer for years, this company has been growing like a weed and for some reason it attracts fanatics on both sides, a rabid group of bears who hate wayfair and equally committed bulls. in shorts, the stock is equally incredible ply polarizing. for years the bulls were

triumphant the shoe is now on the other foot the skeptic control the field while the believers they cower in terror. what went wrong here the truth is that numbers wayfair reported last week weren't really that good but wall street doesn't care about absolute terms everything is relative the stock had went up to 19% after climbing 129% in 2017. when a company rallies that hard going into earnings, it is setting itself up for failure. i call this a problem of great expectations a great term by dickens. the stock is already gained so much in anticipation

wayfair, the stock was priced for perfection going into the quarter. nowhere near as perfect as they needed to be to keep investors happy. let me walk you through the good, the bad, and the ugly so you understand now there is plenty of good here wayfair delivered stronger than expected it's total ordered increased by 21%. average customer spent 6.8%. wayfair's earnings came in weaker than expected wall street was looking for a 52% lost the reason, came in lower than anticipated.

year after year to 23.1% thanks to the booming nature of the online furniture space, taxes becomes less and less profitable on those sales. ugly is the perfect word for wayfair's guidance of the conference call. while the company's forecastwa slep excellent. the rest of the forecast gave the bears exactly it needed to hear the bears worry, they are fretting about profits or really frankly the lack there of. for years these skeptics have been arguing that the business model is unsustainable wayfairs need to spend a fortune to luring in customers they will be able to crush this company like a bug in a

windshield even managers said some things in the conference call that freaked out the shareholder base and they are going to ramp up new hiring a major expense wayfair ceo made it clear that 2018 is going to be an investment year, wow look out people, that is wall street code for hey, look, we aren't going to make the money we thought we were in other words, if you were hoping the company is going to turn the quarter on profitability some time soon, don't hold your breath why was this day so devastating for the stock? but in the latest quarter, we

got a ebit decline and that gives a beat down to the bulls. and the foreign losses keep widening, throwing all the commentary, this is just wayfair will spend a lot of money next year near term profitability is not on the table many become disillusioned and they want to move on when wayfair last reported last november, their losses as the market caught fire, people stopped caring. my view, the stock never should have run so much into the quarter. but now that it is coming down, i am hesitant to recommend it. if wayfair misses on the top

line, its stock will be obliterate last week's hideous decline will look like a walk in the park in comparison the point is there is not much room for error i am not going to recommend shorting wayfair either. if the stock comes down too much it could attract a take over bid. like walmart did with jet.com. that is not a reason to buy it the bottom line, wayfair is a textbook example of why i tell you to stay away from battlegrounds. i believe in the online furniture business in general but less conviction in wayfair's business model at the end of the day, the juice isn't worth the squeeze. i like to say when stocks go

down get cheaper but i need to add a caveat when stocks fundamentals going down joining the sellers may be the most intelligent thing to do let's go to brett in maryland. >> caller: hey, jim, first time caller pleasure to speak with you >> what's up >> caller: as a big golf fan, who do you think about callaway golf >> we like it. we think golf is relevant. we think that golf is going a lot of good things and this is the best way to play it. looking at epr but has other aspects of it. not as attractive to eli allen in florida. >> caller: jimmy, a world

championship eagle booyah to ya. >> never too late. let's go to work >> caller: my question is about roki i listened to their conference call and seems like they have a lot of exciting things going on with their technology. they say as long as streaming video continues to grow, they should grow. they got hammered after their last earnings call is this stock a buy? >> i don't want you to buy it. i fear a lot of competition. it initially want there. but when i see a great quarter and i thought it was one but then met with this kind of decline, it makes me say let's add pause for concern. let's not do any buying. i don't want your investments to be a battle ground like wayfair stay away from this one.

it is not worth it much more "mad money" ahead. could worries about a broken market ring true i am going off the charts. then macy's is higher today after strong 2017. has this brick and mortar found has this brick and mortar found it has this brick and mortar found it hey, what are you guys doing here? we've been helping you prepare and invest for retirement since day one. through retirement... why would we leave now?s fid with solutions to help provide income throughout. so you'll still be here to help me make smart choices? well, with your finances that is. we had nothing to do with that, uh, tie. stick with cramer.e shirt.

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. at this point regular viewers know exactly what i think about the break down that started a month ago. could have been a garden variety selloff turned into a blood bath thanks to these neophyte traders. but maybe that is not the whole picture. maybe just maybe the market was already broken before the tsunami of selling happened. at the very least we need to consider the other side of the story which is why we are going off the charts with the help of

carly garner the author of higher probability trading and someone who writes with me at real money. it is not just the fault of foolish speculators who made big leverage bets that the market was calm and forced to sell common stocks. garner believes the bulls were victims of their own complacency and irrational experience. these trades 23 hours a day. the key benchmarked travel from the 2400 in september. to the 2800 at the peak last month and practically a straight line that is a monster move and in garner's opinion the s&p was

broken broken there broken there her reasoning is simple. asset prices aren't supposed to move straight up or straight down and yes, the big tax cuts count as a big change. but this was an extreme move a rational market should not be going up and up or down and down on the same information. but since when has the stock market been logical. at the end of e day, this business comes down to decisions being made by human beings and humans are emotional creatures they are frail when our emotions take over we tend to take reasoning and sanity out the window. and then folded like a wet paper back that euphoria gave way to

p panic. despite the ridiculous seesaw action you can make the case that the s&p should have never traded above 2730 it broke all the rules of technical analysis when the s&p pushed up against the ceiling of resistance, the relative strength of index, or rsi hit 80 i told you i don't like that indicating we have come up too far too fast and wait for a pull back. few weeks later the rsi surged to 90. that is where we finally peaked. and garner's view these readings were classic signs of a broken market on the up side. people were making money in

stocks and didn't want to admit anything was wrong the s&p peaked in january. garner said this move made perfect sense from a technical expe expe expect ant in her view, it was the run up in the stock market. at this point garner things we are back where we should be and relative strength index has settled back into neutral territory. this really puts things in perspective. before the big run up in january, the s&p had been trading up ever since 2016 each rally had been stalled out.

you think we get a garden variety pull back. and afterwards the s&p assumes the march higher but january was different. s&p pushed through the high end. garner said this was all about fommo, fear of missing out the short sellers got crushed and many didn't recover. pushing us to incredibly high level. the relative strength index also surged past 90 which according to garner is the highest reading we ever have had for the s&p 500. it didn't even test the low end of the up turn trend

look at that. didn't get down to the bottom channel. because we were falling from rare heights if not for the huge run in the few weeks of january, garner doubts anybody would be talking about broken markets it forced out the bears and washed out the euphoric bulls. i think the vix related etns are real problems. i think they hurt regular every day mom and pop investors. but garner makes a good point. betting against volatility is an extreme type of irrational exuberance check out this chart this is vix going back 20 years. the most of the time, you can make steady money shorting the vix which is why so many hedge

funds were doing it. look at these spikes look what happens when the vix turns against you. it turns hard. and something that warren buffett echoed the other day garner says this is a dumb short. these vix traders are the symptoms and not the disease the actual ailment is euphoria here is the bottom line. the chart is interpreted by carly garner suggested this market is less broken than it might seen and that is reassuring on an ugly day like today. her work does make me want to embrace some of this market but only on weakness after the incredible run we just had there is still more to it. but sometimes as i said at the top of the show, you simply need to sit on your hands and wait

for a better opportunity "mad money" is back after the break. hi! i'm mike ditka.

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>> announcer: lightning round is sponsored by td ameritrade it is time it is time for the lightning round on cramer's "mad money." -- and then the lightning round is over. are you ready, skee-daddy? it's time for the lightning round on cramer's "mad money." starting with mike in new jersey. >> caller: boo-boo booyah. fired up for three years talk to me. >> and the stock >> caller: tgtx. >> still going christy in texas. >> caller: how about connoco phillips >> i am not a big fan here

i am going to say don't buy. don in massachusetts. >> caller: great to have you back i am a patriots fan but i am glad for you and your father who i am sure was watching. >> thank you for that. how can i help >> caller: the stock i want to ask you about is a developer of wire free charging technology. the symbol is watt. >> i have looked at that one and many going to save you money. iti. mark in wisconsin. >> caller: jim, thanks for taking my call my stock is semigroup. >> house of pain i am not going to put you in

there. even though it yields eight. i cannot inflict pain on my friends. bernard in florida. >> caller: hi, jim, how are you? >> i am good. >> caller: after this, i'm great. i have been in the market only three months >> okay. >> caller: and i picked the last stock which was texas instruments. >> look, texas is good i think it is an internet of things play. you have to ride it out here it is a good company and that ladies and gentlemen is and that ladies and gentlemen is the conclusion o a pretty big d. so i can trade all night long? ♪ ♪ all night long... is that lionel richie?f th let's reopen the market. mr. richie, would you ring the 24/5 bell?

sure can, jim. ♪ trade 24/5, only with td ameritrade. round" >> announcer: lightning round is sponsored by td ameritrade

a turn around is a beautiful thing to behold especially on an ugly day and that is what happened at macy's today the believers were rewarded with sharply better than expected earnings 3.46% gain in their stock. what happened here to put it simply the new kroemt jeff gennette is a big of a miracle worker reinvented the program which is working. many of the company's regular

big spending company were beginning to feel slighted that is over lift in sales. and eye opening. testing all new initiatives in 50 locations customers came back to beauty which includes high margin perfume sales. meanwhile, dresses, fine jewelry, men's tailor clothing, all doing better no discounting is this sustainable? i think it is. first he told us the train would be growing this year second because of success in omni channel, i think macy's has put up successes now when a retailer turns as we

saw with kohl's, a comeback tends to last longer a partnership is like a battleship once it gets going, it feeds on its momentum something behind the scenes, something to recommend the stock. i am talking about something mundane, i am talking about the balance sheet. what people missed about him, particularly the bears who questions the sustainability about macy's dividend is that gennette cares about fixing the balance sheet. leading the company off its toxic condition. instead he is focused on buying back the company's debt. there is still more to do but gennette is doing it the results have been spectacular with a lot more to come i can see the stock getting a

boost every time profits are sold plus macy's is almost done closing the under performing stores they slated 100 losers to be shuttered and as of now only 17 are still open with my mom working at lit and my dad at gimblees, i was immediately impressed when i met with gennette, but the downers couldn't stop betting against macy's maybe they should have spent more time listening and less time wagering. they would have heard an excellent story about what had to happen in order to turn things around in the next few years. as it happened, gennette got it wrong, it took less than a year. shop there as i have embrace it

and you will see exactly what i mean the bears blinded themselves to all the positives here in the pursuit of a home run short and instead it turned out to be a home run long. stick with cramer. you always pay

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after the close, geez, reseptos with a bought and one of its key drugs got a big, let's say slap in the face we have got a special show tomorrow we have mark bennihof. and under a.r.m.or i like to say there's always a bull market somewhere. i promise to try to find it just for you right here on "mad money.

i'm jim cramer, and i will seeie sharks. cramer, and i will seeie if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." you tomorrow ♪ with a money-saving idea to help parents entertain their kids. ♪ i'm nikki pope. i live in los angeles, california, and my company is toygaroo. (singsongy) look what i have. yay! i have 13 nieces and nephews, and they absolutely love playing with toys. i call them my playtime professionals. the problem is, they get bored with those toys really quickly.