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[Ulisses Pereira]

"China Makes the Going Tougher"

By Jim Cramer
RealMoney Columnist
5/11/2010 4:58 AM EDT


"The debate rages: Do we need the euro to advance, for Europe's economies to get strong and for Greece and Spain to come roaring back? Or do we just not need them to collapse?

I think the latter is the issue. We just need not to be so European-focused. Of course, no sooner do we become less European-focused than we become Chinese-focused and we don't like what we see.

China's bad. It has been bad. It has not yet bent to the will of the government so the tightening will continue. I think that the market deserves to sell off on China after the run we have just had. But I continue to believe that the European situation has stabilized and I would rather have to deal with Chinese braking than Euro breaking.

In each case, what I see happening is that there will be a bifurcation of stocks with the trend line being the export market. If you want to play the exporters you have to have a level of fortitude that most can't. If you want to play the domestic markets you will need yield to support you because the S&P 500 will take you down on days like today.

I think the individuals in this market have to be very careful about playing the export market (we detailed this in our ActionAlertsPlus.com bulletins.) The waters are just too tricky.

But, I repeat, to be as negative as you were Friday, knowing that the Europeans are blunting the problems, even with China still way too hot, will not make you money.

Things are better, China just makes it tougher.

Random musings: China said inflation rose 2.8% in April and stocks sold off on the news Tuesday. "

(in www.realmoney.com)