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tv   Mad Money  CNBC  May 12, 2015 6:00pm-7:01pm EDT

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buying crm, one of those names were sap, they denied it. when you look at sap stand alone up year to date i would still be a buyer. >> thanks for watching. >> 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 try 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 trying to make you a little money. my job is to educate and coach you. call me at 1-800-743-cnbc or tweet me at jim cramer. brainwashed. that's how i feel about anyone
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that believes if interest rate dposs go higher you have to sell everything. a fear that caused the dow to drop 180 points. dow only declining 107 points. nasdaq .35%. a very nice come back in the end. that's why i want to spend some time on the notion when positive things happen to economies around the world. you tend to ultimately go higher. so at the risk at the risk of being like cramer fav and what can drive stocks higher tonight i'm going to show you why good news is good. it all starts at 3:15 a.m. right now german bonds are going down and that means the interest
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rates are going up. that's causing serious turmoil worldwide. for a brief moment a month ago, if you bought german ten year bonds you're making virtually nothing. if you bought those bonds, you were, quite frankly, an idiot or i guess you never buy something for ten years that bays you next to nothing. people who put their money in these bonds were basically following did you go to college to get stupid? you are really stupid. however now those german bonds are plummeting in value and the morons that bought them are getting hit. they're impacting markets around the world including ours. something i saw as i sat in my jammies watching the s&p futures get pounded as they rolled over in the we hour of the morning. now there's a sight. that's just making them minute
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to minute. these funds are making a judgment that as rates go up they will here and around the world. that means stocks have to come down simultaneously. not only is any increase in rates significantly negative but in this case i think it's way off base. europe's rates are rising because the european economy is getting better and therefore there's more demand for loans and more demand for money. that's actually positive. european interest rates should never have fallen to where they were when the get stupid crowd bought these bonds. they shouldn't be where they are now. i expect more pain for those that violated it and while this might actually be hard to believe i had the same hair as sonny back when i had hair. the reason rates in europe are rising is because more business is being done there and that's good, not bad. i'll tell you why. i have three positives about why good is good. the first is that many u.s. companies do a ton of business in europe and the weakness over there is killing them.
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our technology companies, industrial companies, aluminum you name it they've seen horrendous causing the estimates in there for their stocks to come down like clock work as the numbers are trimmed. second positive any country with a strong economy will also have a strong currency even if the government doesn't want one. imagine the euro zone as one big country with 770 million people that speak a different language that us. europe become ace magnet for money and that's what's happening right now. euro is going higher and that's fabulous for companies that do business there. almost all of which have given up on the euro ever rebounding or at least within the next year or two. i get that. european central baichknks, well let's say they're doing their best to make it weaker versus the dollar. they'll sell better than our cars. it's demand for their currency.
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we're used to ceos coming on this show and guiding down their estimates estimates. could be resurrected. why? because a quarter of its estimates move. the weaker is a huge drag on china. keep in mind i'm way ahead of others on this belief. when i articulated this to people, people are like are you kidding me? i don't care. i was way ahead of others in the turn of europe. it will be one thing if interest rates in these countries were so high it could hurt business. the bond buyers went to college to get stupid. unfortunately they automatically sell everything around the world which is why i come back to them.
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ooen even as the three prong scenario is there and brings me to the united states. one the wave of selling subsided interest rate which is had been rising reversed late this morning the futures turned positive. afternoon sell off no doubt trigger triggered it i'll be watching in my jammies again tonight. no, they're not feet pajamas. we can freak out that our interest rates hit six month highs. let's get scary sounds. kind of like steven king but i have the benefit of age and i can tell you rate versus plenty of room to rise before they derailed. remember it's the velocity of the move that matters more and not the direction. we'll be fine. now let's deal with the matter at hand. stocks. if you trade everything in lock
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step and only care about the s&p 500 i can't help you. go change the channel. i'm never supposed to that say. i don't want you watching the show if it's buy sell buy sell buy sell. you're not focused. i'm interested in the stocks of companies that i like at the prices like to buy them. this connected to the german american bund society conundrum is giving you the chance to buy the stocks going up not down. take ibm. it had dramatic declines in european sale with the strong dollar, weak euro combo. it needs more business to get done. the futures drove this stock down to 168 this morning. i like that price. there's a whole other group of stocks that do better in this environment too. companies that get taken over because the fundamentals are improving in europe. don't sniff at that. it sells filtration equipment. 40% of which goes to europe f. the european economy turns, it's
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why it was up nearly 20%. not one but two companies. and theromfisher wants to buy it. that's part of the good news is good news reddit explain it like your five-year-old equation. many companies are worth more to others than themselves. something the futures don't reflect. hence verizon snapping up aol today. now things can ebb and flow. at any given moment you might see an interruption to the euro strength or the dollar may surge because some fed pop off says rates need to go higher. those guys love microphones. still my point somewhere business is positive for stocks and it will remain that way until interest rates go so high it begins to hurt commerce. we're nowhere near where interest rates can hurt the real economy. either here or in europe which is why you need to take advantage of those sellers that went to college to get stupid because they're selling precisely what you should be
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buying. if like me you used stocks as pieces of companies to own and not just pieces of papers to trade. gabe in california gabe. >> caller: booyah mr. cramer. >> booyah, what's shaking? >> caller: i wanted your opinion on hct. it's yielding almost 6% now and i'm wanting to get in. i'd love to know your thoughts. >> do not back away just because there's an etf that contains hcp going down severely. at 5.7% and 52 week low you my friend are getting bargain. it's going down because the ten year has gone to 2.3 something or other. let's go to ann in florida. >> caller: hi jim. you are my apple watch. you take my financial pulse at 9:00 a.m. and 6:00 p.m. every weekday. thank you. >> you're quite welcome. thank you very much ann. >> caller: yeah i have made a lot of money when i seldold perrigo
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at $200 a share. >> well done. >> caller: but i bought a second stake at a lower position and this is climbing up too. why, i don't know because the merger fell through. >> it's not fallen through. we have hope there. we think that perrigo is going to get bought. really do. i really do. i think you're in good shape. i want you to hold on to perrigo. i think it goes higher. by the way, speaking of higher they traded higher. i'm not kidding. it's not just about getting stupor stupid. it's about remembering the old days. we are nowhere near where the rates can hurt the economy. the get stupid crowd takes action. react positively. makes sense to you? you have to hear my take. then i get a firsthand look at
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imb's super computer watch. can it help move the needle for one of warren buffet's biggest positions? exclusive. plus it's turning your ideas into real products and just earned a spot on cnbc's third annual disruptor 50 list. don't miss my exclusive with the ceo of quirky which is anything but. >> don't miss a second of "mad money." follow @jimcramer on twitter. have a question tweet cramer, #madtweets. send jim an e-mail to or give us a call. 1-800-743-cnbc. miss something? head to
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you want to know why this business of picking stocks can be so hard? major reasons that people are so cynical about everything even when the positives are self-evident. take aol which was up on the takeover bid for verizon.
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they reported a quarter showing you how all the work is starting to pay off. going from a dial up internet provider to a profitable company with terrific online properties including the huffington post as well as one of the best search systems on the web and incredible advertising technology that works fabulous with video. i'm always working for company with products that work at least as well on your cell phone if not better than on your desktop. that's why i remain devoted to the stock of facebook which is better on cell phone than computer. it's why i think twitter could be monetize first degree they coul how to charge for what individuals and companies get. they could be profitable if they just find the trolls that attack me every day. it's why i believe yelp will be taken over because the mobile app is so useful. it's also why i had high hopes for aol. when i saw how mobile was truly taking off for them gone were any of the losses. the sad but profitable local news platform.
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instead you saw signs that they were back on the growth path. excellent cash generation as armstrong wrote in the first line of his release, aol grew as consumer base strongly so continued strength in video, mobile and program advertising while we updated the capabilities of the company. aol continues to grow in strength and we're on a mission to scale the first media technology company of the internet and mobile age, end quote. normally that sounds like typical public relations hyperbole but they are the first company that may have a real alternative to google when it comes to sophisticated advertising technology. in other words armstrong has cracked the code of how to make money from video online and the stock rallied 10% on the quarter. but what happened next? yesterday one of the more important analysts out there and individual from the research firm downgrades the stock from a hold to a sell. talking about how the desktop
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business is declining rapidly and it's full of one off tactics that may not be sustainable. yesterday he takes it to -- yesterday. believe me if you read this report you would have sold this stock nine ways to sunday. subtracted value. do you know who obviously may not have read the report? or if he did he scoffed at it. lowell mcadam because today verizon did $50 all cash for aol. $11 higher than before the quarter. verizon didn't sell the stock. it bought the stock. but now verizon didn't care about the declining desktop because it's all about mobile anyway. it's something that's perfect for a wireless provider that wants to get bigger in content production. sometimes you actually do have to just believe. you can be skeptical but in the end maybe you have to trust. if you were on the aol conference call or read the release you heard a compelling case. fortunately for armstrong and his fellow shareholders the sirens were ignored and you're
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all the richer for believing and trusting this man that saved aol from itself. deval in new york. >> caller: booyah mr. cramer. >> sweet. what's shaking there, bud. >> caller: first and foremost i want to thank you for your excellent and incredibly helpful advice you have provided to us viewers for all of these years. >> thank you very much. >> caller: congratulations to your wedding also. >> not bad. i like this thing. i like the wife. what's up. >> caller: now to the question. i wanted to know your thoughts on whether or not ebay would be a possible take over target by alibaba, especially now since we are almost near the spin off. >> i tell you, i never recommend stocks on a takeover basis. ly tell you that i think the ebay and paypal combo, it's good for both. i particularly like paypal. it's going to be good. you have profits. verizon believed in aol and if you're one of the shareholders that had faith too i say congratulations. much more "mad money" ahead
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include anything date with watson. imb super computer that can interpret millions of data points in seconds. i'm going to talk to the cfo. then quirky is helping average joes invent products. it made it's way on cnbc's annual disruptor 50 list. plus where is oil going now. i have an idea. we'll check out commodities when we go off the charts. stick with a cramer. ♪ ♪ ♪
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it took tim morehouse years to master the perfect lunge. but only one attempt to master depositing checks at chase atms. technology designed for you. so you can easily master the way you bank.
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>> in the wake of a multiyear decline shares still down 21% from its all time highs in 2013. ibm bottomed up 14% from the january lows. he continues to buy stock and he has a terrific buy back and ever growing dividend. after the last quarter which was better than expected things are improving for this company because it's reinventing itself and part of that involves an analytics ego system with cognitive thinking under the rubric of watson. you may remember that as the company that won jeopardy in 2011 but the technology behind that computer has been the driving force behind ibm's $17 billion business and it is growing. watson is a cloud based platform that can learn and reason about giant volumes of data in many languages to help give people the insights they need.
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lep it can also create tasty food recipes including this dish from my own restaurant. now earlier today i got a chance to chat about this exciting cognitive force with imb's chief financial officer. >> martin we're here with the brains of the outfit. we're looking at watson. tell me strategically what this means to imb because we know it's strategic part of this group that is much of the future. >> it is. so first welcome to watson. thank you for coming here. you know what watson really is at its core is a terrific example of what ibm as a company does which is build solutions to solve our clients most difficult problems. so in the case of watson watson represents a few hundred patents, right? a very good example of the prowess of our research team. that is a lot for our research team. that's like a few weeks of work
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but at its very core it's a set of technologies that will now, we will build a platform around to solve health care for instance. we have announced a new watson health care unit. that health care unit has not only watson at its center but it has a group of leading partners. it has a fua quiz situations that we have made. >> who have you teamed up with? >> j and j, medtronic. we brought those on to the ibm platform. they sit on top of watson. so watson at its core a set of technologies solving a solution that our clients need. >> why can't we use people to solve it. >> we have been trying. we have been trying and there's lots of technologies. our brains have figured out how to build watson. it's not that we have displaced the brain here. what watson does though in the case of health care it has 12 million journal articles in it. there's no doctor that's going to remember 12 million journal
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articles. that's its reference point and think about the critical elements of health care. you need -- it's time sensitivement you need a diagnosis quickly and you need a diagnosis that's correct. so the correctness of the diagnosis is helped dramatically by completeness. those go a long way to making sure you have a complete solution and because it has a lot of computing power. it gets there much, much faster. >> we spend a lot of time working with orphan drug companies and i wonder that's all well and good but how is it with ibm? >> the way the financial model works with regard to watson we're early stages here. it fits into our analytics portfolio. we had about a $17 billion analytics business last year. watson is part of that 17 billion. now watson is currently sold as a service. only as a service. we'll monetize watson as a
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service basis. either the payers in the health care system but also very importantly we're monetizing watson through building an ecosystem. so we have made the application programming interfaces the apis available to a broad range of partners now building their applications. some in health care and some outside health care. >> one of the things you mentioned in your conference calls, imb is getting involved in social media in a way lucrative for the companies that are customers of ibm. sometimes that goes over the heads of people. >> sure take our relationship with twitter: watson has access to all of the twitter data. if you're a roadway tailer and you try to figure out what do customers think about my product or should ian gattis pate moving it somewhere else or anticipate the next trend, you can use that day to to make a more insightful decision. before you were probably using
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weather data or prior history data. but that's not always a great indication of where the market is moving and twitter is the most real time that you can get in terms of customer sentiment if you're certain retailers. so making better decisions. does watson know what i want ahead of when i want it. >> there's a set of capabilities that are predictive. they cannot only think about or observe what is currently in the marketplace. it can pick up trends. it can help make links you wouldn't make without the completeness of the algorithms that bring it together. >> on the conference call you have to get ibm to be bigger without the rest of ibm which is very important, generates a lot of cash falling off. how do you get strategic to be
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larger? >> well it's a few things. the $25 billion growing at 19% growth, that grows faster than the marketplaces in which those solutions operate. so it's already growing 50 or 60% faster. the reason it grows so much faster is because of the core businesses where we learn a lot about how our clients operate. we know about where their data is. we know about how their business processes work. so the knowledge we get out of the core businesses allows us to grow at a much much faster market rate than we would if we didn't have that insight. so that 25 billion without those core businesses right now probably be less than 20 and it would probably be growing at 11 as opposed to the 19 we grew last year. >> all right. so is it possible that there are many uses of watson that we're just starting to fathom given the fact that watson is bigger than our own skulls?
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>> absolutely. that's the reason to build an ecosystem because in an ecosystem you now have thousands of people out there thinking about how best to use watson. when we bring our clienlts in here and we talk about their specific industry and show them examples and our creative juices start to flow we'll get ten new cases in each 20 minute discussion. it's phenomenal how big the use cases become when people are creative. >> okay you have been very vocal about your relationship with apple which to me means that you're in the field with apple. apple data from your ipad to watson, how sit working? >> in the case of watson depending on the use case if you look at a health care case with a doctor they'll have all of that watson output on an ipad and will be able to interact with watson in order to figure out diagnosis all on an ipad.
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this is a very complex system to you need simple ways to interact. >> before this it was guess work. you made a couple of phone calls to see who is working on what kind of test? >> you had obviously a network. you have your own education but within all of that despite all of your best efforts, we see this in every industry there's biases in the data and biases in your approach to decision making. there's things where just because of bandwidth you have to exclude them just to get through the time pressures in your role and that's true across all industries. watson doesn't have bias. >> thank you to the cfo of ibm. i'd love it if you could show me around. >> terrific. >> this room was created to let humans understand what watson is doing. what we put up today for you on the walls is basically an example in health care. this is a 9-year-old boy who came into the hospital with a number of symptoms.
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doctors had a difficult time diagnosing him. in a few hours watson is able to diagnose the problem. basically we took over a week of diagnosis in the hospital and collapse it to a few hours. watson say learning machine. we're using the top institutions in the u.s. to train watson in the best knowledge and the best protocols and the beauty of watson now is that we can scale that globally. >> we do a lot of work on "mad money" with orphan drug companies. would watson be able to match that patient with where the test is right now? >> absolutely. watson can look through all of the clinical trials going on around the globe and do the perfect match. something that the doctors just can't keep up with these days. >> can you show me some other applications? >> absolutely. it's not all about health care. we have other things going on. retail and financial sector. financial advisor as you know is buried in information. so what better than to have watson behind the scenes helping this financial advisor make
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sense of all of this information in real time. >> so if one of our viewers is interested in something in particular they might be fascinated whether that is any correlation with asian stock. >> correlations understanding, look for patterns that humans can't find in massive amounts of data. let's talk about chief marketing officers that want to deal with the explosion of social media data and basically watson now can take social media, can take twitter feeds, can take facebook information and find out about the patterns and directions they're going on in the retail industry. >> all right. so let's say you're a fast food company and you think i developed some foods that are natural and organic. would my customers want it. >> that's the kind of thing and look for patterns of new things that are developing in social media. >> there's millions of tweets. what kind of pattern can watson see that i couldn't see or you couldn't see. >> watson can read multiple
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languages and make sense of that. what kind of person are you. what are your preferences and why get to individuals and taylor to programs and products for that individual. >> and the success rate for a customer. >> goes up dramatically with watson. >> thank you. >> coming up, reinventing invention. it's transforming your ideas into real products. and now some of the biggest players in the business are hopping on board. this game changing platform put quirky on cnbc's third annual disruptor 50 list and cramer has the exclusive with the ceo next.
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brought you fitbit which
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just announced plans to go public. post mates and more. in the last 60 days alone demand leader post mates which brings anything to your door in under an hour struck major deals with starbucks, chipotle and mcdonald's in the turn around plan. our mission to bring you the best and brightest companies continues today with the launch of cnbc's third annual disruptor 50 list for 2015. this is the most revolutionary start ups out there. making its third appearance is quirky which moves up from 18 to 15. this company got it's start as a platform where people could submit their own ideas and they would take the best of the inventions all the way to the she feels of retailers around the world including amazon. originally it was about facilitating innovation but it's now narrowed it's focus. meanwhile they have also started to partner up with more companies like ge and mattel. in order to become quirky
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generated inventions to market. a lot of the companies -- we talk about the companies all the time. they're laurjing their and baby formula machine don't mean to obscure that one. let's take a closer look. this is a fun one guys. the founder and ceo read more about his revolutionary company. welcome to "mad money". >> good to see you. >> have a seat. >> a lot of ceos come out. this one is fun. you are about having a conversation and having fun and having everybody win. do you think that is at a fairway to look at it? >> well we get 4,000 ideas a week. we only make 3 or 4 so not everyone wins but we try to make it as accessible as possible. >> you have taken a course. anyone can go to the website. you can see the cool things. if you narrow ited it down to an
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area that i'm worried that they're involved in. a competitive area in the store shelves which is these household appliances but you seem to be breaking the mold. i vn seen this one in any store. >> that one we just announced. the whole poppy line we did that in conjunction with amazon through the dash replenishment service. so amazon sends you more pet food, more baby formula. more coffee. this is a new line that will launch later this year. we take in these ideas from all around the country. this idea came from an inventor in wisconsin in high school. he said he couldn't fit all of his power breaks in a power strip and submitted it to the site. we have sold millions of units. >> he made money off of it. >> he made close to a billion dollars. now ge is co-branding the product so you can turn on and off each outlet with the wink app. >> i want to go over what the world was like before and after.
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people run ouft money and try to get something on qvc or breaks down and can't afford a 3-d printer you come along and say listen we will sheppard this. you take your toll but you will sheppard it. before, what happened. >> before, you know, people spend their life savings on their invention. my parents second moretgage their house. the best ideas in the world aren't in the world. they're locked in people's heads. we want to unlock them. >> you have a million people that have heard about this. >> a million people that are active on our site. >> what do they do? people at home are probably saying there's a lot of people watching right now, they're thinking i want to be in this quirky. what happens if i sign up tonight? >> you submit your idea so the world votes. people vote and comment on each others ideas and every week on thursday night we debate each other on what the best idea is. >> why don't we have cameras at your place on thursday night. >> i want to come down. >> come on down. we can put you on the panel. but you have to be opinionated to be on the panel.
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>> no. i won't help you at all. to me this is the great american story. you even have a situation where someone had another idea and you look back and you saw that someone else had that idea and you protected that original guy's idea. >> we did. we take these inventions seriously and we want to protect our investors. most americans think when you have an idea you need a patent. what you need is a great product and to get it to market quickly. some products are patentable and some aren't. >> you do have products like $1.50. that doesn't seem to be the emphasis anymore. >> we started out very small. we started in my apartment in the east village. small things citrus spritzers, cord clips. and as we grew and brought on ge and harmon and matel that gave us a larger platform. >> rntdaren't you going to change
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ge -- >> it's my piece. >> you don't think they can make it so they take it the way corporate america does? you are not exactly a traditional corporate america. >> i am not exactly a traditional corporate america. >> do you think they'll recognize the greatness what you're trying to do. >> there's two things every big company wants. number one, they want speed. it's hard to build an innovative new product. number two, they want fresh ideas and we get 4,000 fresh ideas every week. >> they don't have that ability, right? >> no most companies, if you send apple a product idea they'll send the envelope back to you. they don't want the liability of knowing that something came in. >> this is great. we all had ideas and, you know what, we always felt like i wish i could do it. you're doing it for people. that's fantastic. founder and ceo on quirky. when you see it next time i'm going to be a judge thursday night. i don't do anything thursday nights. >> you are. >> i'm going to do it.
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>> "mad money" is back after the break. great to see you. strong can heal from miles away. unite us for a common good. and turn a simple video into endless laughter. strong can take you... all the way to the summit. oh my! so cool! think what strong can do for you. can i play too? at&t's network has the nation's strongest 4g lte signal.
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>> it is time.
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it is time for the lightning round. are you ready? time for the lightning round. rick in maryland rick. >> a spicy baltimore blue crab booyah jim. >> oh. >> i'd like your opinion on mccormick. >> it's a great staple and keeps doing well. patrick in arizona. >> hi jim. >> hey, patrick. >> my portfolio's big loser is wynn energy. should i take a big loss? >> i'm not recommending linn so when i say you're fine. someone is going to say cramer loves it.
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you can percolate higher [ inaudible ] >> you take the gain. i like harris here. let's go to dennis in nevada. >> caller: jim how are you doing? >> not bad. how about you? >> caller: okay. what do you think about pandora? >> not a big fan of pandora. too much competition. the stock had a big move. i don't want to play. let's go to bob in new york. bob. >> jim it's clear energy. >> no, the country didn't go that way. judy. >> caller: i'm calling about sprout. >> no i want to be in the store with the goods. meaning i want white wave. not sprouts. randy in california. randy. >> caller: jim, booyah from dry california. >> well, let's hope for rain because we need that for the
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almond crop. what's going on? >> caller: listen, jim, i have some -- shares of rite aid. i have 7,000 shares. what do you want me to do with them? >> you take out the houses money. rite-aid is a stock that jim cramer on twitter, people hate it because it's down 38 cents. i'm telling people to own rite-aid for a long-term. it's a good turn around situation. bob in illinois bob. >> caller: hello jim, how are you doing? >> not bad. how about you. >> caller: southwest airlines. >> the only airline is southwest. gary. >> caller: hi, jim, a huge booyah from california. >> man california is dry. what's going on? >> my wife and i love your enthusiasm. >> thank you. >> my question for you is related to met life. >> met life is a good company. i'm going to recommend that
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stock. and throw in traverse. that ladies and gentlemen is the conclusion of the lightning round. >> the lightning round is sponsored by t.d. ameritrade. custom screener on your desktop, that updates to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys! i love this times of year. for all the confidence you need. td ameritrade. you got this. there's some facts about seaworld we'd like you to know. we don't collect killer whales from the wild. and haven't for 35 years. with the hightest standard of animal care in the world, our whales are healthy. they're thriving. i wouldn't work here if they weren't. and government research shows they live just as long as whales in the wild. caring for these whales, we have a great responsibility to get that right. and we take it very seriously. because we love them. and we know you love them too.
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comcast business. built for business. down nearly 50% from its lowest in march. the larger commodity indices heavily weighted toward oil have barely begun to rebound.
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what does that mean for the whole commodity complex going forward? we can answer that question with the help of carly garner who is author of traders first book on commodities. what they noticed is despite the fact that there's a strong core relation between the action in crude oil and broader commodity industries, the big commodity industries this time, they haven't done much. however she believes eventually they will. especially if the dollar continues to decline. so weaker greenback equals higher commodity prices. in short they think the remainder of 2015 could be a good time to get commodity exposure as this comes roaring back. it would be new and different. let's take a look at the ubs commodity index. this is not the type of index you would invest in or trade in but it's a terrific tracking tool. now the dow jones commodity index includes 20 different
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commodity future indexes across ag precious metals livestock. what's been happening here? the price of crude has rebounded nearly 50% since march lows. it's only increased 10% over that same period. nearly all of this appreciation is because of the oil route with a little bit coming from the meat complex in some copper. in short, the broad commodity index is lacking dramatically. garner thinks that could be a sign that other commodities could soon soar. i could see why they believe the rest of the group should play catch up. she likes soybean, sugar, coffee natural gas and even gold. check out the longer term monthly chart of the dow jones commodity index. this is a pretty incredible picture. i was astounded. i didn't know how long commodities had really fallen. right now it's hovering near
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100. garner cease promising signs of a bottom. specifically in the commodity index with the floor of support at the 100 level which is also where it bottomed during 2009 financial crisis. in fact this index hasn't gone below 100 for any length of time since 2002. it's hard to imagine dow jones commodity index at these incredibly low levels in a quantitative easing world where china could soon follow. the price of oil is slammed over the past year and the great recession was in full swing. oil was trading in the 30s. what it suggests is commodities are cheap. given the massive omt of moneyamount of money the fed pumped into the system. these low levels can't stay. she believes the trading range is likely to hold which suggests the commodity index will find it's way back to the 130 level. still move to 130. that would represent a 30% gain for the commodity complex.
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that could make you serious money. however if we're going to talk commodities we need to address the elephant in the room. the u.s. dollar. remember all these commodities are priced in dollars so when the dollar is strong and was very strong until about a month ago commodity prices are weak but when the dollar peaks and goes lower the prices will go higher. take a gander at the weekly chart of the dollar index which invests in the foreign currency and not just the euro. the dollar has peaked for weeks. as you can see we see a pull back over that period. there's still plenty of additional selling around the corner. when you look at the rsi, the relevant strength index it's an important momentum indicator at the bottom. it's only in the middle of the range. that says the weakness in the dollar has actually been mild versus what it can do. we get the traders report and
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that tells you what the big institutional players can do. anything that trades in the future's market including support. the speculators are still massively short the european currency and by default if you're short in the euro you're long the dollar. even though it looks like the dollar has been slammed lately there's still a huge long position that needs to be unwound as these hedge funds reposition themselves. in short garner thinks the dollar has a lot further to fall and if that's the case commodity prices are headed higher across the board and they add also the earnings. according to the charts there's a whole commodity complex. wouldn't that be interesting if europe gets better and it is while i have been staking a line in the sand. it's going to turn out to be very right when nearly every commodity, i think this goes lower in the commodities go higher. stick with cramer.
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