Cramer: Bears' Hubris Means Enormous Upside Today
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Cramer: Bears' Hubris Means Enormous Upside Today
"Bears' Hubris Means Enormous Upside Today"
By Jim Cramer
RealMoney Columnist
5/10/2010 9:18 AM EDT
"They didn't cover. They went in to the weekend short. I just don't get it.
On Friday I did several pieces saying I expected a short-covering rally going into the weekend. It was simply a calculated bet based on other stressful times where the shorts have been unwilling to go into the weekend because they feared good news. It was the pattern in 1990, when there were "fears" that James Baker would negotiate a peace with Saddam Hussein. It was the pattern in Gulf War II, where there was a sense that we might be able to negotiate anything to avoid an actual land war.
Each Friday we saw rallies that picked up steam in the middle of the afternoon as the shorts showed prudence and didn't want to be greedy.
I figured that the same level of prudence would be seen on fears that the Europeans might figure out that they couldn't let the euro die. I was also bolstered in my belief by Doug Kass' blog, which emphasized that something big could be coming -- really big. Why go into the weekend short if that could happen? Why risk it?
They did. They didn't cover. They pressed their bet. Amazing -- they pressed their bet. And they went home very short. I was hit by several people who talked about the huge crash that could occur on Monday. I saw commentary to get out now. I did not see anyone feel that there could be some real risk to staying short.
What's funny -- it was always "crying wolf," as nothing good ever did happen in those weekends. It is almost as if this time they figured it all out: There wouldn't be anything big to worry about.
Turns out it was huge.
Now, I already hear these shorts saying it wasn't big enough. They will fade this opening as being too strong. I think they are positioning themselves for a fall, keying on oil and the euro going back down. They will need this market down to preserve performance. The problem for them is that away from the PIIGS, the actual fundamentals are getting better the world over, INCLUDING EUROPE -- in some ways, ESPECIALLY Europe, although it is worth noting that the Baltic Freight had its biggest gain in months.
It is reasonable to expect that the market can come in, but you have to know that we are not the same as we were on Friday. We just aren't. And that takes the biggest bear case -- the collapse of Europe -- off the table. On Friday I said that if we don't get change, we will see 9000 on the Dow. We got change. I still want individuals to be cautious, as the hazards of Thursday's trading still bruise. But we have to recognize that the people who pull triggers, the bears, didn't have a plan for the surprise. The surprise happened. The rally is on. Yes, it could be one day. But so what? At this pace, it looks like it could be a one-day bull market.
I'll take it. "
(in www.realmoney.com)
By Jim Cramer
RealMoney Columnist
5/10/2010 9:18 AM EDT
"They didn't cover. They went in to the weekend short. I just don't get it.
On Friday I did several pieces saying I expected a short-covering rally going into the weekend. It was simply a calculated bet based on other stressful times where the shorts have been unwilling to go into the weekend because they feared good news. It was the pattern in 1990, when there were "fears" that James Baker would negotiate a peace with Saddam Hussein. It was the pattern in Gulf War II, where there was a sense that we might be able to negotiate anything to avoid an actual land war.
Each Friday we saw rallies that picked up steam in the middle of the afternoon as the shorts showed prudence and didn't want to be greedy.
I figured that the same level of prudence would be seen on fears that the Europeans might figure out that they couldn't let the euro die. I was also bolstered in my belief by Doug Kass' blog, which emphasized that something big could be coming -- really big. Why go into the weekend short if that could happen? Why risk it?
They did. They didn't cover. They pressed their bet. Amazing -- they pressed their bet. And they went home very short. I was hit by several people who talked about the huge crash that could occur on Monday. I saw commentary to get out now. I did not see anyone feel that there could be some real risk to staying short.
What's funny -- it was always "crying wolf," as nothing good ever did happen in those weekends. It is almost as if this time they figured it all out: There wouldn't be anything big to worry about.
Turns out it was huge.
Now, I already hear these shorts saying it wasn't big enough. They will fade this opening as being too strong. I think they are positioning themselves for a fall, keying on oil and the euro going back down. They will need this market down to preserve performance. The problem for them is that away from the PIIGS, the actual fundamentals are getting better the world over, INCLUDING EUROPE -- in some ways, ESPECIALLY Europe, although it is worth noting that the Baltic Freight had its biggest gain in months.
It is reasonable to expect that the market can come in, but you have to know that we are not the same as we were on Friday. We just aren't. And that takes the biggest bear case -- the collapse of Europe -- off the table. On Friday I said that if we don't get change, we will see 9000 on the Dow. We got change. I still want individuals to be cautious, as the hazards of Thursday's trading still bruise. But we have to recognize that the people who pull triggers, the bears, didn't have a plan for the surprise. The surprise happened. The rally is on. Yes, it could be one day. But so what? At this pace, it looks like it could be a one-day bull market.
I'll take it. "
(in www.realmoney.com)
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