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tv   Mad Money  CNBC  July 2, 2018 6:00pm-7:00pm EDT

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vote today >> heavy presence here he dominated >> good catch. >> for that, i'm going to sell i think the margins are deteriorating. sell >> i'm melissa lee thanks so much we're off tomorrow mad money starts right now my mission is simple, to make you money i'm here to level the playing field for all investigators. there is always a bull market somewhere, and i promise 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 just trying to make you some money. my job is not just to entertain you, but to educate you. so call me or tweet me close watchers of "mad money" know i'm not a chartist, but i do play one on tv weekly, show you technical patterns that can
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predict the next big move for stocks given i've based almost all of my work on fundamental factors on companies i study and not the shape of their charts, it's both heretical and antithetical to my traditional stock picking methods bus. i know from your feedback @jim cramer, you're interested in this analysis, and importantly, it's proven itself time and time again to get a lot of people involved at the right level, say. now, not for a minute as i explain in "get rick carefully" where i devote a whole chapter to charting, have i become a chartist myself? i still single out the fundamentals, the annuals, the sectors, and i overlay them on my broader world view at the moment chartists can care less about this stuff they often don't even care what the company does i wonder if they could do their jobs with the companies' names blacked out. in fact, i'm sure they could some of them hate the distraction of knowing much at all about a company for fear it would bias them against the stock's chart.
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you imagine? now, i've become pretty proficient at charting over the years, but i still rely on the work of professional technicians to demonstrate how to you charting and to learn techniques that can in turn teach you that's why tonight i'm picking some of the best of best charts with some of the best technicians, exploring the patterns that have become reliable to where i'm pretty astonished how accurate they can believe. i guess you can call me a believer that's why i started saturday morning reading the standard & poor's daily action stock chark charts i match those charts with the patterns i have learned over time i think all of the research available for the most winning of the charts and they often become segments on the show that you see later in the week. why do the charts work people always want to know first, you must consider them as if they are footprints at the scene of a crime these footprints trace out what big money managers might be doing with their buying and
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selling of dollars these portfolio chieftains at large funds often know more than others, including you and me the charts of where their money goes, the charts of the stocks put together clues that these big boys leave second reason to care, there is a remarkable self-fulfilling nature of charting stocks. so many professionals look at these drawings and take them to heart that they almost simply avoids stocks with predictably terrible charts and find stocks to own that have positive moves in the past. don't i know it. when i work with karen cramer, she would look at the charts each morn seeking ones that stood out as potential breakouts and breakdowns and research ones with the most predictable patterns to get a handle on what might really be going on we got some of our best ideas from the chart-inspired brainstorming sessions, to produce excellent short and long-term results. all of charting technical
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analysis starts not just with the pictures of individual stocks, but also what are known as the internals internals. patterns about stocks in the aggregate that give you clues of the direction of the entire stock market for years now since the great recession that showed the inherent weakness in our financial system, the so-called systemic risk i talked about, there has been tremendous skepticism about any advance of stocks i believe the systemic risks have been reduced, i know each rally creates a worrisome set of risks. i know many of you fear that you're coming in at a level that could turn out to be, let's say too late, too high, and you will lose money either way. >> sell, sell, sell! agghhh >> good technical analysis includes indicators to help you determine the overall direction of the market, more important than ever given that so many stocks are influenced mightily by the tug of the s&p 500 stock features sometimes to technicians, everything hinges on putting together the individual companies and the bigger averages to create comparisons
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that illuminate conclusions about true market strength they're looking for what is known as confirmation of a move to detect its legitimacy i think confirmations are incredibly important to the safety of a move they need to be explained closely. the most important and obvious confirmation, let's say the dow jones industrial average hits a new high historically, that high will not be sustainable unless the dow jones transportation index also hits a high or confirms the breakout status of the dow itself the dow jones transportation index is a measure of commerce tracking trains, planes, trucks, freight forwarding really, isn't that a good gauge? if the industrials and the transports hit new highs, i often tell you that the move is legitimate and it can be trusted. it is real this is some of the oldest technical work dating dak to charles dow who created the especially upon mouse dow theory you often hear at the top of the show that i like how the transports are acting.
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that's because i'm trying to see if the move has staying power in order to bless it. i look at a host of other indicators the banking city is important to me, the housing index, the semiconductor and stocks, and the rth, that's the all tan etf that encompasses the big retailers. i like to see all the indices move up in sync before i truly bless a move for you you have to put the maximum amount of chips on the table, oh, boy, but is the inverse true if we get a move, a move up without confirmation from the majority of these indices, the whole rally could be a fakeout [ booing ] and can't be trusted the classic example, if you go move up to record highs before the great recession, you will notice something pretty incredible if you go back and study. you will notice that there was almost no participation among the financials, the retailers, or the techs technical analysis got you out of that market before it was too late if you followed those indicators did much better than the
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fundamentals what are the other internals i look at? i analyze the advances and declines to figure out whether the rally's too concentrated i like good bread or a lot of participation by many different groups i also look at the new high and low ratio. it isn't easy to get on that new high list. first, the company has to be doing exceptionally well the larger force, federal reserve, political tensions, politics have to be aligned to make some stocks successful enough to get on the new list. the high list is rarefied territory you. run the gauntlet you have a good stock, a stock i probably want to buy on any pullback that is market-related, and if there are a lot of stocks in the new high list for many different industries, that's a terrific sight. so here's the bottom line. you may not be a technician, but you need to know what the charts are saying, and you need to know how the read the internals to verify a real move or a phony one. stay tuned and we'll go over a whole host of predictive patterns that sufficient fuse pretty much everything we do
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around here, not just on the off-the-charts tuesday, but in stock selection every single day. jim in michigan, jim >> jim, hi, how you? thanks for taking my call. >> of course thrilled that you called what's up? . >> you were talking about secular stocks could you define for me once again what is secular stocks and maybe give me an example or two? >> certainly look, this is a very important issue because it's a term that gets thrown around, secular, parochial. secular means a secular growth stock is something that does not need the gross domestic product of the world to increase in order for it to beat the numbers. some of the classic secular grower stocks would be some of the biotechs, some of the retailers that have terrific growth gary in california, gary >> caller: mr. cramer, boo-yah too you. >> boo-yah, gary.
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>> caller: my question is regarding dividends in a down market, sir. if you're accumulating dividends on a number of stocks as you suggest, it is better to reinvest them in a down market or to take the money as cash and then possibly reinvest that in other opportunities? >> well, you see we don't know when a down phase is going to end, and we know the power of compounding is an amazing thing. we're going to stick always on this show, i know it sounds pretty pedestrian, but we're always going to opt in favor of reinvestment because fortunes have been made through the power of compounding i've got to go with that regardless of the near-term consequences because i'm thinking long-term for you fundamentals, oh, they're key. but technicals matter too. tonight i'm bringing you into the world of mastermind chartists so you can learn to see the whole picture behind a stock's moves. on "mad" tonight we know the chart is important, but what technical tool can help you detect floors and ceilings i'm revealing it
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then, how can you tell if a company is ripe and oversold and mixing patterns isn't only for fashion. i'm highlighting the patterns worth banking when it comes to investing. so why don't you stick with cramer >> don't miss a second of "mad money. follow @jim cramer on twitter. have a question? tweet cramer, #madtweets send jim an emale at or give a call miss something head to food for thought your healthcare business.part of so that if she has a heart problem & the staff needs to know, they will & they'll drop everything can you take a look at her vitals?
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want to demo the latest innovations and technology? do it here. come see how we're making things simple, easy, and awesome. plus come in today and ask about xfinity mobile, a new kind of network designed to save you money. visit your local xfinity store today. ♪ tonight we're offering the best of the best of technical analysis, a one-stop shop of everything you need to know to augment your investing with help of some of the best chartists in the land now, let's work on something that has been the province of the best chart work on the show, spotting bottoms for best entry points and examining ceilings for the best places to exit, or sell when you pick individual stocks, you're betting from the moment you buy them that they're going to go higher i know, it's a pretty simple concept, but how often do you do
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solid fundamental work on a company and try to figure out if it's the right decision to pull the trigger because your homework is finished and then it turns out to be a terrible time and you're buying oblivious to the stock hey, my homework is done let's go buy maybe it's not the right moment. after all the work i've done on off the chart segments, i say you're being shortsighted after you have done all that homework, but before you put the buy order in it's not just the right time since you've done the homework in fact, i consider looking at the chart or the stock you like as part of the homework. get that in your head. get it ingrained in your thinking finding bottoms after long declines can be incredibly lucrative. for example, let's go back to the bottom of 2009 now, i had a sense that the decline's velocity was lessening. i heard the famous haynes bottom call based on his enate feeling. i know my friend doug kass who writes with me part of the family had turned
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pronouncedly positive. he was saying we're in a generational bottom. but i was still skittish about pick anything individual stock to recommend to you. so it was looking for a situation that seemed about as bulletproof as i could find. i came up with at&t, the phone company. it had so much going for it. you had to go back in the way back machine, but it included a smashing roll-out of the apple iphone, which was going to produce record profits as at&t took business from its appleless competitors, a yield 6.2% at this point the yield was much higher than about any stock in the dow the dividend was back to humongous cash flow. still, the stock kept plunging every time i thought i had firm footing. in other words, i had done my research and thought it was on firm footing no no. i waited a few days where the stock seemed to stabilize and decided at last the stock might be level in judging moments like this, it's best to check with a chartist so i did i actually brought in four, four chartists.
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amazingly they agreed that at&t had found a strong foundation and was definitely worth considering for an investment. they didn't care at all about the fundamentals take a logistic at what attracted them take a look at this chart. first, all four technicians agreed that at&t had established as what is known as a climax low at 21, back in the tsunami of selling that this was this period you just to understand we're at one of these moments that was so hideous. you can see the big lift big lift in stock, well, i don't want to give away the story. that's where lots of sellers capitulated. this is where they capitulated, right here but buyers had started to step up to create a base, stock in see the extended base. we're floor the stock at that level. they arrived at that judgment by looking at where the volume, the sum of all the transactions during that period had expanded to a level far in excess of a normal period's trading. you can see, boom, take a look at that, right that's a sign that the sellers had exhausted themselves the volume levels according to technicians showed that most of the big portfolio managers
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wanted out of the stock, they had fled it by now at the same time buyers had stepped to meet the fly with the con come mitt important level of demand each level that they knocked the stock down with their own seller as long of sellers where they're dumping, no base can form. bad time to buy. a climax is a sign that those potential sellers who have been holding on for some time are finally giving up on mass. big give-up. remember, technicians don't care why that might be the case when they see the volume gets larger, expands, but the stock doesn't go down, that means at last the stock has found its floor so, it's now time to buy it's safe. that's where the buyers are at last equal to the sellers in their power to determine the direction of the stock, and that's a form of equilibrium it's finally upon us that's going to happen when a stock takes out resistance overhead, okay
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to examine the possibilities of a stock the technicians don't just look at the closing price and the graph, the price against the previous day's or week's close. they don't say that looks good thark looks bad, no. that's not helpful instead, technicians use what is known as a moving average to better represent the action in the stock's price movements. a moving average is formed by taking the closing average of a stock over a period of time and then adding those prices up and dividing by the particular measured period. we're doing everything tonight i'm break it down. for example, you can measure moving average over, say, a ten-day period by agenda up ten days worth of closing prices and dividing by 10 and plotting them on a graph each subsequent day, you made the new close and you drop off the earliest price to get the sum of the ten-day measuring period the four technicians i checked in for at&t, they selected a 200-day moving average they noticed even though at&t had found a floor at the$21 level, that the stock had repeatedly bounced off of, it
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kept failing, meaning it couldn't get through, failing to move up above the 200-day moving average. they had all done the same amount of work that's what they looked at that created what looked to be a ceiling. we had the ceiling, the 200-day moving average, there is nothing you can do they felt that every time it got there, the stock was capped. then at last, at&t cracked through the ceiling of resistance, and that's the 200-day moving average that was the sig cigarettenal. that was the signal that at last at&t could generate a great trade or an investment the old roof became a new floor. here is your new floor every time the moving average went above the old roof it would create the possibility of a new floor. then the stock could come back and test that floor and it held. they recognized the stock didn't break that newfound base and instead bounced off it in other words it didn't go back to where that climax low was it held. looking back at the beautiful bottoming that we see here with
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at&t, it now seems like child's play, doesn't it yeah, it was done going down yet at that moment it was anything but easy because at the same time these technical analysts were saying the bottom is in and it's time to buy, the fundamental analysts were scared out of their wits. not one was valuable to me in helping determine the bottom they were scared to death. some were worried about pension occasions that could cause the pension to be slashed, something that was way, way wrong. but it scared the heck out of me that base, that floor gave the stock a launching pad to blast off in an almost straight line into the 30s it's one of the biggest gains a safe stock could every give you. when you see this reliable pattern, despite what the fundamental analysis might be saying you have to use the discipline that these technicians might give you and pull the trigger and take advantage of a fabulous buying opportunity that otherwise might be overtloofkd market takes a real shellacking never took it out. way up after the break, i'll try to make you more money.
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with the cutting edge tools and insights to help you not only see your potential, but live it too. morgan stanley. ♪ welcome back to our special technical show the next crucial thing for technicians, whether a stock is overbought and therefore ripe for a pullback or maybe oversold
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and ready for a bounce you determine this by charting the ratio of higher close, also known as the relative strength index or rsi the relative strength index is a momentum oscillator that measures the direction the stock is going and the velocity of the move we like to match the relative strength of an individual stock to something else, perhaps the relative strength of its sector. we're always looking for anomalies where strength stands out because that's a sign after a pending move, perhaps a momentum switch that we wouldn't know if we just read the research on the stock. i often turn to bob lange and tim collins, both who have done remarkable work on this topic. many technicians vary the length of time over which they measure relevant strength. ryan collins uses ten days two, weeks to get a relative beat on the stocks they're looking at. they're looking at any action that reverses the action of the previous period. they love strong relative
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strength situations, but they also like to time their buys after pullbacks, get that better industry sbri point. they really care about bases typically when a stock gets overbought it is ripe for pullback, ones with many buyers tend to snap back after they've gotten too far away from their longer term trend line the inverse can be true too. a stock can fall so far, so fast that you should skppt a snap-back because it's technically oversold we see these patterns constantly they're reliable indicators that a change in direction is about to occur if you are debating buying a stock after you've done all the research and you find the stock is overbought, i usually tell you to wait for a pullback that almost always comes. that's because collins has duffer neuvo work to retrace some of the moves back to better entry or exit points charting, though, the tricky
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periodically, some stocks are so strong they break through all the ceilings of all traditional significant measurement periods and then they stay overbought, perhaps for weeks at a time to define the historical trading patterns that trap them within the bands of extremes. they defy the notion of the graf taittational pull and can't be contained by any of the various ceilings that overbought conditions usually bump into and come crashing down from. when you spot these highly unusual moves, you know what you may have to strap yourself in to get real moon should let's take a look at this one. this is what i mean. this is rare, but when it happens, it's big money. we saw it occur in july of 2009 as dan fitzpatrick pointed out to me, this time in las vegas sands. the summer the stock of the las vegas sands, one of the largest casino companies with a very important business in macau
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falling every time it hit, boom, boom, boom you know, just not working but when the bulls finally broke out of the corral, the stock gained all of the strength instead of grouping to recover from the overbought status that's a very rare pattern it stayed overbought that told you good things were going to be ahead. it never pre treated as you would have expected. buyers wouldn't quick despite the stock being overbought and that is a sign the strongest kind of positive move in the book might be taking place at any given time i expected a pullback, but, no you had that gigantic long-term overbought. this stock proceeded to go from $10 to $48, pretty much in a straight line with no substantive pullback to speak of and overbought condition that can stay overbought is a golden opportunity for a huge move and right back to being overbought again. i like the marry the fundamentals with the charts so i'm not too depend on the pick fwoushlgs what was happening underneath this chart that it
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was able to stay overbought for so long? you know what was going on right then that's when the chef profits went from being vegas to macau, the only place in china where gambling is legal. into an international powerhouse that might have been naed namme macau sands. they were still dazed that we had had such a horrendous decline to begin with. they weren't thinking of macau here the chartists were thinking there is buyers lurking. volume is another key tool they use that to spot pivots we often say that volume is a lie detectors, telling us whether a move is for real or not. when there is a small move on light volume, the technicians ignore of it but when there is a small move on heavy volume, the chartists drill down to see if it's something bigger and infinitely more tradeable they're looking for accumulation on big volume, meaning big money managers beginning to accumulate
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stock in an aggressive way or distribution that's a synonym for selling of a stock. and that could telegraph a big decline. they measure the moves by something called an accumulation distribution line. when the calculation of the accumulation distribution line is arcane -- i know it is, charting whether a stock closes higher on greater volume versus lower on low volume, any will offer you the kind of chart he wants, i care passionately about it because it can go against the grain of conventional thinking about a stock. that's why i love charts so much sometimes they're right. we saw them being right in monsanto in july of 2012 this was an unbelievable one that i completely got wrong. thank heavens for the chart. i didn't care for the stock at this time. i didn't like gmos i was kind of biased tim collins saw it another way he said the accumulation distribution line showed that while the stock had down days, they were on light vibes all the down days you had low lines and heavy volume on the up
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days that's a sure sign that more money was flowing into the stock than out of it collins noticed such a persistent accumulation or buying pattern versus the distribution or selling pattern, convinced him that large funds were building positions to own the stock long-term. not to rent it for a quick move. it turns out that what i didn't see, what i was so confused about was that monsanto's stock had started to be correlated with the price of corn which was going higher back then because of newfound demand for ethanol i was far too concerned about near term earnings and worries about a shortfall and wasn't thinking big picture, but the charts shows you big picture the work of collins told you not to fear. it was showing you that something bigger was developing. he was dead right. and a stock i would have kept you out of turned out to be a big winner when corn shot up, taking monsanto's tock and its earnings up with it. the big boys new the relationship with corn and monsanto's business.
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you were able to piggyback off their research by using collins' work, which isolated the real underlying strength of the stock as depicted by the accumulation distribution line. i got smoked he saw it. bottom line we need to look at lots of different indicators to spot big news, like indicator distribution, to spot important turns that might not be visible otherwise. powerful moves can and often do elude those who are only focused on the underlying companies and not the action of the stocks themselves let's go to dan in illinois, please dan? >> caller: cramer, boo-yah, thank you for demystifying the market and helping us make it accessible >> that's what i want. i want everybody to understand their money. that's my goal how can i help >> caller: thank you i'm wondering if i start with a small position in a stock, a company i like, and the stock keeps going up, the most it
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comes down is maybe 2, 2.5%, how can i get a more sizable stake >> you missed it my discipline will cut off the downside which is far more important than cutting off the upside if you bought a position in the stock and it kept going higher and you didn't get anymore, well, it's a trade and you got to take it i know people don't want the hear that, but when you violate your basis and pay up, i can show you for years and years and years for my charitable trust, i have done the work it is almost always a mistake. chartists use all different types of indicators to spot big moves. that helps them stay ahead of the game and the fundamentals. now you're ahead too much more "mad money" ahead. head & shoulders isn't only used for preventing and the rough i'm telling row how to make money. you're sharks, you're not going to want to miss my take between the dynamic between the two. and got a burning question tweet me @jimcramer, hat tagg
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mad tweets stay with cramer what's better than "mad money" how about more "mad money. follow "mad money" on facebook, twitter and instagram to go one-on-one with cramer >> what other questions do we have ah, i always tell people you have to start with an index fund because i need you to be diversified. >> get more with guests, and go behind the scenes with the most interactive show on television >> if you can't explain in three points high nguyen you're buying a certain stock, don't buy it. >> follow "mad money" today. with the new chase ink business unlimited card i get unlimited 1.5% cash back. it's so simple, i don't even have to think about it. so i think about mouthfeel.
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♪ we've learned a lot tonight about the key terms of tactical analysis now let's look at some of the individual charts that many of you find fascinating, even as some of the pan, they almost sound silly, as if they're mimicking letters or geometric shapes or even body parts. i learned not to ignore one of the most simple but by far the most reliable patterns out there, the dreaded head and shoulders pattern. >> no, no, no!
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>> house of pain >> my charitable trust ultimately took a bath in red ink because of that ill informed or could i say early buy remember, i like to do mea culpa's in the show. i like to you to learn from my mistakes they get less dependent on metal, more proprietary forms of aluminum, something it solidified when it split into two separate companies here, why don't you take a look at alcoa it enjoyed a healthy run from the winter of 2010 right up until february of 2011, rising from $13, a nice rise, right up to 17 as its earnings trajectory seemed to have finally turned around. not long after the stock hit 17, it took a quick dive back to 15. no reason i could discern, then it quickly reversed and went right back to 17 and then went up to 18 on the eve of the quarterly report i thought the quarter when it
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was announced was a fine one, beating both the top and bottom lines. most of the time that's all you can ask for. what worried me, though, after initial positive reaction, the stock then dropped down to 16, 16 and change on the news of that better than expected quarter. a few days later, oh, there we go, back to 17 and i felt almost vind indicated, come on, it can go back and 18 level soy went and bought more i went and bought more right there. well, could have been more wrong? i don't think so, because that 17 to $15 dive represented on the chart as a point a and b, then followed the run to c, 18, back to 16, d, finally, 17, e. you know what that is? that's a perfect head and shoulders pattern. yeah, just like a human's head that is it that is the most frightening pattern in the entire chart book, and alcoa traced it out, just when i thought we were out of the woods
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what was happening during that period that the head and shoulders pattern flagged? aluminum quickly came into a glut starting the turn that kleinfeld worked so hard to execute. he could control his own company but not the price of the commodity itself it still is aluminum over the course of the next few years kleinfeld was able to rally off the lows, but that came only after complete completion of the brutal head and shoulders pattern from a few years before, one that cost the trust quite a pretty penny mae cull pal one of the thing i admire about their technicians is the inverse head and shoulders signals the opposite, a chance for glory at the beginning of 2013, lots of people thought the economy was taking off investors were running for the classic drug stocks. and caterpillar, united technologies, you know the kind of rotation, that kind is usually the death knell for stocks that typically go higher only when the economy is
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slowing. however, tim collins on off the charts segment, you know what, jim? you have to take a hard look at pfizer because it was tracing out a reverse head and shoulders pattern. it would be precisely the kind of company i would shun. i would never touch this thing when the economy is speeding up. but if you take a look at this chart, you can see that pfizer traced out a left shoulder and then started declining aggressively in november the stock bottomed to form the head, and then in december it caught a rally and then a pullback to create the right shoulder the key with this pattern is the neckline, the line that connects the head to the two shoulders. when a stock breaks out above that line it tells the technician that you're about to witness a big, wibig, big move. collins predicted if you take out that neckline, it could be in for a monster run given that money was pouring out of the staples and drug stocks i
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was asfwoynd this reverse head and shoulders pattern. i didn't trust it one book i knew it was a bad stock. but collins said rotations smotations you close your eyes and buy the stock because something big is going on i was thinking it was inconceivable. sure enough, he was right. i was wrong. the stock jumped more than 10% what caused the move soon after collins flagged this bullish reverse right here, the reverse head and shoulders pattern, the huge drug company decided to spin off its animal health division. it was a shocker into a new and publicly traded company that ultimately created $15 billion in value who knew the chart did. here is the bottom line. patterns matter. when you see head and shoulders pattern, don't take any chances, sell, sell, sell these some of it, please and when you see a verse head and shoulders developing, even if it make no sense, you got to
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consider buying some that's how powerful these moves are, and it's vindicated far more often than the skeptics would ever think possible. stay with cramer ♪ ♪
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time for your business of the week robin raskin is a trend spotter. as founder of the company living in digital time, she has been at this since before the internet was invented, and she is still an active player how does she stay on top in an industry dominated by youth? to find out her game plan, watch your business, sunday morning at 7:30 on msnbc. >> sponsored by the powerful backing of american express. don't do business without it ♪ we run the gamut of technical training tonight on this special show, including some of the basic patterns like
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the head and shoulders and reverse head and shoulders, but those patterns aren't the only chart patterns that can be relied on to tell us the truth when the fundamentals give us little insight into the direction of stocks. one chart type we've come to love on "mad money" is what's known as the cup and handle pattern. we've seen it so often, it's been so reliable, i've used it to keep myself in stocks that otherwise i might have been turned off on or shaken out by take the stock of dominoes we got behind the pizza franchise when it trade down to ten bucks, and we were feeling pretty darn greed y when it traded up to the 30s it again to drift down on no new news i hate these situations. why? i'm always paranoid enough to believe that something might be happening and i don't know about it and other guys do when the analysts are iffy and split as was the case with dominos in the 30s and the company isn't talking, that's when the technicians are most needed so i called ponce and asked for
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help if domino's moment had come and gone take a look. here is what he said at the time when we reached out the stock at dominoes had just begun to drift back up. well would have blessed telling you to sell. we thought maybe we should ring the register, take the big gains for our viewers. so tempting right there. huh-uh ponce told us to do the opposite that little back up was the sign he needed that all was well. he said it was a very special moment and he was anxious to show us why. with that return back up to say, 36, okay, dominoes was tracing out a perfect cup and handle formation. that's right a pattern we have found as reliable as the head and shoulders. a total launching pad for a next big emove. you caught the beginning that sloped down to 2wr8 the base of the cup was, and i was really nervous right there. he told me tot to be
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the stock climbed back to 36 and we got a 37, a little sidle to 37, 38 and that would be the beginning of a handle that almost always signals a much higher move it always goes like that very reliable. sure enough, ponce's work nailed it domino's received a douple and then some as earnings turned out to be accelerating the stock was consolidating. it was ready to power higher in the next big move. this was positive action domino's was embracing technology the web and the cell phone, limited order takers let customers place orders directly via the net well will have left a minimum of a double on the table if it weren't for ponce's guidance when i was concerned about another one of my stock, monster beverage, i thought they had run out of room. couldn't go higher near the end of 2011. i needed chartists to give me skinny i kept hearing that red bull was
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trimping monster, and there was the distinct possibility of regulatory intervention to the energy drink segment always deadly. check this out he said for months the stock of monster had been bouncing off its 100-day average, the blue line every every time it looked like it was going down, it rebounded. rebound, rebound, rebound, rebound. he said that monster was trading at a series of triangles, also known as flag patterns where you get a resistance and upward sloping floor. see that triangle, tragle, triangle when it hits a new line of resistance it punches through. he said any time you get these pennant formations that are a prelude to what is known as a continuation pattern, you do not have to worry about a stock running on empty matter of fact, you had to buy this thing both hands every time the stock proceeded to jump to 79, confounding the naysayers who may have been less negative had they known about this pattern. they were just worried about the government intervening
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monster tied up in coca-cola, in a deal that rocked the world, show you'd that energy drinks are here to say. once again, i would have been shaken out of this stock's move if it weren't for ponce and his chart hand-holding there are a lot of different variations of these triangle and pennant formations identify this one. big move up. citigroup. everybody hated it in june 2010. the highs stayed the same. he loved this right here this is what's known as a wedge pattern. collins find it as reliable as the pennant. we've had tremendous success following the works of carolyn, the fibonacci queen. and the mathematician. the fib queen uses ratios found in nature. you heard of fibonacci patterns. well also like the work of carly governorer who uses data from the commodity futures trading commission to indicate when too many in the wrong way on a
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commodity. the bottom line, technicians and fundamentalists can co-exist make peace with them both, and i bet you'll make a heck of a lot more money than if you're blind to one or the other, and certainly to both. "mad money" is back after the break. with tripadvisor, finding your perfect hotel at the lowest price... is as easy as dates, deals, done!
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with pg&e in the sierras. and i'm an arborist since the onset of the drought, more than 129 million trees have died in california. pg&e prunes and removes over a million trees every year to ensure that hazardous trees can't impact power lines. and since the onset of the drought we've doubled our efforts. i grew up in the forests out in this area and honestly it's heartbreaking to see all these trees dying. what guides me is ensuring that the public is going to be safer and that these forests can be sustained and enjoyed by the community in the future.
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♪ hey, cramerica, in charts you're looking for trends, finding big moves and the meaning behind them. on twitter, what's trending can also tell you a lot. #mad money tweet, anyone today i'm counting down some of your top tweets to see what's trending first up we have a feel-good tweet from at dee thompson thank you, jim cramer for all the good advice. thanks to your books i'm retired at the age of 55 you know what? i want you to continue to own a lot of stocks. you're not going to get a lot of
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income from other activity, from other bonds, and stocks compound you get that dividend, keep reinvesting. here at srt talent tweets my 19-year-old wants to start saving for retirement. do you have any advice unfortunately it's boring as all get-out. we're going to start with an s&p fund find one with low fees once they've put $10,000 aside, then they can focus on individual stocks. them's the rules i'll not vary them next don't let the haters get to you, jim keep doing what you're doing stay above their pettiness periodically i get tire today and i get a little angry and i get a little feisty, but what i like is this is my little zone here, right? it's all nfl you come into my box, you're going to have to be tackled. i'm not looking the other way. next up, you want new investors to max out on index funds?
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401(k) okay to invest? again, this show is incorrectly known as some sort of training show where we don't like index funds. we're an investing show where we demand you be in index funds sorry for the misinterpretation by you last but not least, jack says excited i've found t the @jimcramer show at a relatively young guy the guy is a genius with a load of valuable information for free i only wish my mom and dad were still alive because then, finally they could say hey, i told you, jimmy. stay with cramer mr. cramer, absolutely love the show >> we really appreciate you throughout, man. >> boo-yah, my kids are in elementary school, learning so much from you. >> boo-yah, mr. cramer >> i know you hear this all the time, jim, but thank you, thank you, thank you so much >> this has been my best year by far and away in the market. >> i just want to thank you for looking out for regular guys out
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there. >> i am trying to teach people to be better investors i'm doing my darn best that's the goal here. >> great to hear your voice and know that you're there for us. causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.
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♪ all right. i like to say there is always a bull market somewhere. i promise to find it just for you, right here on "mad money. i'm jim cramer, and i will see you next time. >> take control of your financial future with the new cramer's exclusive interview interview, full episodes, analysis, even your own soundboard plus special access to "mad money" 101, with rules and techniques to break down the market for all investors >> the red flag that makes me drop a stock immediately -- >> it's everything you need right when you need it the new erica.
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for motivational guru gary shawkey, the heat is on. you can accomplish anything when you walk through this fire. narrator: but shawkey's much more than a firewalking showstopper. he's a relentless con man selling imaginary products while raking his victims over the coals to steal millions. i'm making five figures a week. i cashed a 20-some-thousand-dollar check the other day. narrator: but when shawkey hatches a scheme full of shadowy government contracts and million-dollar paydays, he sets sail for murder. his motivation was pure greed. absolute greed.


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