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[Ulisses Pereira]

"Without Futures Support, Stocks Look Ugly"

By Jim Cramer
RealMoney Columnist
11/11/2008 7:10 AM EST

"Without the futures ramping, don't things seem so expensive? Those consumer nondurables -- uh-oh, they have dollar pressure. The stimulus package of China? Is that why we bought Fluor (FLR - commentary - Cramer's Take)? Where are the orders? All those oil stocks looked so inexpensive with oil at $66 going to $70. But we just paid $2.25 at the pump with no line and the futures are at $60. Citigroup (C - commentary - Cramer's Take) hit a 52-week low despite talking about an acquisition, and Bank of America (BAC - commentary - Cramer's Take) is a smidge above the 52-week low. What happens if it takes it out? What happens if Google (GOOG - commentary - Cramer's Take) takes out $300? Where is the Nasdaq bid, for heaven's sake? Where did all of those morning buyers go who kept coming back right until the end?

And that's the problem, isn't it? The collective cheapness of equities vs. the overvaluation of stocks. We simply don't get an opportunity to do anything but lose less than the other guy, and we are supposed to like it because stocks only get this inexpensive once or twice in a lifetime.

"Time to buy?", a great piece by John Authers in yesterday's Financial Times, is emblematic of what I am talking about. He's got the story: Bears and value guys are warming up to the market.

At the same time, what would get these guys to like the market? To actually like it? If it never got to the levels they like it to go to. That's the answer. Everything else is just early.

Which leaves ourselves open for the endless declines in too-cheap-to-ignore Goldman Sachs (GS - commentary - Cramer's Take), "which must have huge problems even though we like it long term," or to Citigroup, which has to be as cheap at $11 as it was in 1990 (except it went to $5 then when it was really cheap), or GE (GE - commentary - Cramer's Take), which was cheap ... oops -- negative piece in The Wall Street Journal about what else, its finance division, which has made it cheap for 30 points and is a monster, obviously, because it borrows short and lends long, which should be good except there is a belief it can only borrow from the federal government.


So the animal spirits are tamped until the futures buyers come in and then the ETF double and triple buyers -- the absurd, never-should-have-been-approved ETFs that allow you to get double and triple returns by the day on the market -- work their magic and move the market up in order to comply with their charters, which require them to move it up with futures buying ... until they have to move it double and triple down with futures selling to meet their bear charters. You can't make that up.

Oh, and let's not forget that when it's down, that's a tremendous opportunity to buy the market for the hobbled hedge funds that have cash ... except, of course, that the cash is meant for redemptions.

Under this scenario it is impossible not to be bullish, right? Especially because you must lose money to be successful.

I remember when I was at my hedge fund and someone would mention that you have to lose money to be successful, and I would put out that the reason I compounded at 24% after all fees, the thing that doesn't make me a joker no matter how hard rival news organizations and pot-shotters try, is that I never lost big money to make money.

Which is exactly what the bulls do every day ... or at least the first part.

At the time of publication, Cramer was long GE and Goldman Sachs. "

(in www.realmoney.com)