Cramer: "Complacent Negativity Rules the Tape"
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Cramer: "Complacent Negativity Rules the Tape"
"Complacent Negativity Rules the Tape"
By James J. Cramer
RealMoney Columnist
5/26/2004 8:26 AM EDT
"Could we have become complacently negative? Did we start thinking that nothing mattered, that good news meant nothing forever and that the market could only go down? Have we heard nothing but "it's about to crash" so much that we all have too many hedges and puts and too much cash?
The science of bottoms is like the science of the brain: complex and we can't really figure it out yet because there are too many unknowns. We recognize symptoms -- that reversal day that showed there were way too many shorts and the market could turn on a dime was one. The fact that eBay (EBAY:Nasdaq - commentary - research) and Yahoo! (YHOO:Nasdaq - commentary - research) and Research In Motion (RIMM:Nasdaq - commentary - research), the three hypergrowth stocks, kicked into action last week is another symptom. The idea that fantastic earnings surprises can go forever unrewarded -- just that sheer thinking, so in evidence after Lowe's (LOW:NYSE - commentary - research) reported -- is another.
Yeah, I think we just got too complacent. I called it "irrationally nonexuberant" last week because it seemed ridiculous that Comcast (CMCSA:Nasdaq - commentary - research) could trade down after it dropped its Disney (DIS:NYSE - commentary - research) bid to issue millions of shares and then started buying back millions of shares. That's irrational and complacently negative thinking at work.
It's always difficult, so difficult that I know I have to fall back on talismans -- bull/bear, put/call, S&P oscillator, the tick and the TRIN -- as signs that things are out-of-control negative. I have to fall back on them because the micro news backdrop has been fabulous and nobody cared and you have to bet that couldn't last forever.
Well, how about this phase? You have to think that it can't end until every short gets taken out, and Tuesday they were only shooting the front-line troops.
If I were a bear, I would come in today and push the futures down to see if I could get something going to the downside to break the bulls. If I failed, I would cover.
Aha, there's today's game plan! "
(in www.realmoney.com)
By James J. Cramer
RealMoney Columnist
5/26/2004 8:26 AM EDT
"Could we have become complacently negative? Did we start thinking that nothing mattered, that good news meant nothing forever and that the market could only go down? Have we heard nothing but "it's about to crash" so much that we all have too many hedges and puts and too much cash?
The science of bottoms is like the science of the brain: complex and we can't really figure it out yet because there are too many unknowns. We recognize symptoms -- that reversal day that showed there were way too many shorts and the market could turn on a dime was one. The fact that eBay (EBAY:Nasdaq - commentary - research) and Yahoo! (YHOO:Nasdaq - commentary - research) and Research In Motion (RIMM:Nasdaq - commentary - research), the three hypergrowth stocks, kicked into action last week is another symptom. The idea that fantastic earnings surprises can go forever unrewarded -- just that sheer thinking, so in evidence after Lowe's (LOW:NYSE - commentary - research) reported -- is another.
Yeah, I think we just got too complacent. I called it "irrationally nonexuberant" last week because it seemed ridiculous that Comcast (CMCSA:Nasdaq - commentary - research) could trade down after it dropped its Disney (DIS:NYSE - commentary - research) bid to issue millions of shares and then started buying back millions of shares. That's irrational and complacently negative thinking at work.
It's always difficult, so difficult that I know I have to fall back on talismans -- bull/bear, put/call, S&P oscillator, the tick and the TRIN -- as signs that things are out-of-control negative. I have to fall back on them because the micro news backdrop has been fabulous and nobody cared and you have to bet that couldn't last forever.
Well, how about this phase? You have to think that it can't end until every short gets taken out, and Tuesday they were only shooting the front-line troops.
If I were a bear, I would come in today and push the futures down to see if I could get something going to the downside to break the bulls. If I failed, I would cover.
Aha, there's today's game plan! "
(in www.realmoney.com)
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