Transcripts For WHO Mad Money 20151111

Seam an optimist by nature. You have to be an optimist to invest in the stock market. Why . Because you need that faith that things can get better than they are now. In other words, you have to bet on progress, and on discouraging or middle days like today, dow up 28 , nasdaq declining, i found that maintaining a positive albeit skeptical stance makes you a much better investors. Some of you may regard this world view as obvious. But its anything but. Were on the eve of a tightening cycle where the fed is going to raise rates multiple times. Each rate hike will test your ability to stay in stocks. Each rate hike will make stocks there are many stocks that can still do well, especially if the fed takes a measured and considered approach to raising rates, making sure the economy absorbs them without too much of a slowdown. Why do i care about this fedinspired Interest Rate risk . Because even though i accept the fact that the fed has to tighten because employment is too strong for them not to, i also see many areas of weakness in the economy that i really wish the fed didnt feel compelled to take any action. Theyre far more likely to make things worse than better if he start too soon and go too far. Manufacturing has slowed as many u. S. Based companies are uncompetitive overseas versus Foreign Countries that sell in foreign currencies. Some companies are so feeble that their stocks are caught up vicious rolling bear market. Oil and Gas Companies are forced to cut back on their efforts to drill, because theres such a glut of both crude and natural gas. And that was once a huge source of new jobs. And a competitive advantage that might dwindle from lower prices. Lately, the real strength in the economy has been in housing and autos. Theyre the two groups that get hit hardest when the fed raises rates. D. R. Horton reported a fantastic quarter and its fabulous, right . However the first thing i thought wasnt, wow, what a terrific quarter. No. I said, oh, man, i hope the fed doesnt say housings doing too well so we have to raise rates immediately. No doubt, hortons strength at this point will be used against it. I feel the same way every time i the fed is worried about any strength. It doesnt recognize that the strength is only in pockets and can be taken away at a moments notice. But if im so concerned, if im so worried, what is there to be optimistic about . What can go right during a series of rate hikes to would make it worthwhile to own any stocks . First, we could get some help from overseas. We really need it. If your portfolio starts growing with some alacrity, european banks wouldnt be so eager to debase the euro at our expense. If somehow latin america were to stabilize with brazil getting something right, anything right, impossible as that sounds, it would be terrific for us. We wouldnt have to worry so much about the soaring dollar if any of these places actually got better. But theyre not. Second, we need help from the government. More specifically, we need washington to stay the heck away from business. If the government wants to do something actively helpful, it should spend some money on infrastructure, rebuild crumbling roads, bridges, passenger rails, or how about spending more money on defense, stay strong, project power where its necessary . That said, if our leaders could do something without shutting down the government in the process, that would be good for the stock market. If Interest Rates go higher, a market can handle a slow, steady increases in rates. Its another thing if rates go higher and credit stays as tight as it is now. That means fewer projects, more cancellations, more postponements of major decisions. If credit gets easier to come buy, even if its slightly more expensive, it can balance out, especially when it comes to housing and medium to small size businesses who are hurt by higher rates. Fourth, we need to find companies that can raise prices in this environment. When rates go up, investors arent able to pay as much for earnings. The price to earnings multiples shrink. Bonds will start giving us some attractive returns with much less risk. Most of it has to do with the inability of most companies to make as much money in a rising Interest Rate environment as they did in a lower rate environment. However, there are still plenty of companies, companies that you know, that can do well with rates rising. First, the banks. Every time the fed raises short term Interest Rates by a quarter point, the banks instantly make more money off of your deposits. Basically the equivalent of a price increase they put through to all of us. The banks are the one group that directly benefits from higher rates. And that will mean they will exceed their earnings estimates when the fed tightness. Who else can put through price increases . Companies without much competition. Thats why i like that constellation brands, stz, so much. It sells corona beer in this country. It competes against a handful of Beer Companies that seem very inclined not to have a price war. Facebook, amazon, netflix, and google which i know is now called alphabet but still has the google stock symbol. Think about it. Who is going to have a price war with facebook . It doesnt have any competition. Plus you make the content. It costs them nothing. Everybody wants to be amazon. Every retailer. But nobody spent the money, including walmart, to compete on their level. Thats why they could raise the price for amazon prime, maybe even put through a big increase. I doubt anyone would balk. Netflix, this company is taking the world by storm with a service that seems radically underpriced given his library and programming. Youtube has become a de facto homegrown Worldwide Television network with millions of entries that cost the Company Nothing to make. Again, whose going to start a price war with these guys when theres no competition . Stocks like mcdonalds, where the ceo announced changes today that will bring out even more value than hes done already. Or Companies Like allergan that are taking share from the pitiful, hobbled valeant as theyre head to head. Yes, its going to be harder to find winners in a world where the fed is tightening. An optimist knows where to find them. The optimist will ultimately win the war. Lets take some questions. My name is andrew price. Were cofounders of a Technology Platform that helps veterans find resources in the local community. Do public markets, do you think theyll continue to support tech ipos with such high valuations despite the fact they cant be profitable . Great question. I think i know your dad, mike price. We went to oklahoma in 2009 when i saw the phillies lose to the yankees. I was watching in bar with him. The private market is very sober. Theyre starting to recognize the scrutiny as salesforce. Com has been saying, is too great for these companies. The private companies are not going to be able to get those valuations. All that said, some companies will get through the chute. But right now were paying too much for private. And i think were not paying enough for public. Yes, sir. Nick from dallas, texas. Great to be here. Dallas. 2 and 16. Youre from the academy. Yes, sir. Tesla Just Announced Quarterly Earnings of negative cash flow. Why do you see the future of electric cars and tesla . A great question. I bet you if we polled people in this audience, its so great to have a live audience, and thank you for everything you do, you would find the vast majority of people want to own tesla. But in the end the stock isnt valued like that. Its valued by how many cars they can sell and how much they make per car. The answer is they make very little, to nothing. Stock. People want to own stock in a car company, of the cars that i like. But i dont trust tesla, the stock. Some people want to buy it. I say i cant value it. Its the only stock in this whole market that i cannot value. And take it from me, i like to value things. But i cant value them. Yes, sir. Im peter from new york. And my question is, with crude oil under 50 a barrel, when do you see it going over 50 a barrel and what does the future of oil look like . The saudis have to stop pumping. As long as theyre pumping 11 million barrels, theres no way. I think were stuck in a range between 40 and 50 until the saudis blink or accept the fact that its not right. I think they want to destroy our american industry, just so you know, so i dont think its going to happen. Thank you for that question. Optimism can make you a better investor. Being an optimist will help. Shares tumble on iphone demand. And more americans looking to clean up their diet with brands like silk. Plus a company that provides u. S. Special operations the ability to zip into combat with offroad vehicles. Dont miss my interview with the ceo of polaris as we is a lawsuit our brave Service People on this very special edition of mad money. [ applause ] veterans have traveled to foreign lands, put themselves in hard way, sometimes to terrible consequences, so we can raise our families in peace. Were only free because many of those veterans have been so brave. We owe them a debt of gratitude that were happy to pay back. Follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Ever since darryls wife started using gain flings, their laundry smells more amazing than ever. sniff uh honey, isnt that the dogs towel . dog noise hey, mi towel, su towel. More gain scent, plus oxi boost and febreze for 3 big things in one gain fling. Its our best gain ever bring us your aching and sleep deprived. Bring us those who want to feel well rested. Aleve pm. The only one to combine a sleep aid. Plus the 12 hour pain relieving strength of aleve. Be a morning person again with aleve pm. Choose to move freely. Move free ultra has tripleaction support for your joints, cartilage and bones in one tiny pill. Move free ultra. Get your move on. And now try move free night. The first and only 2in1 joint and sleep supplement. Girls giggling girl hes so cute. What should we name him . mixed gasps snorting new pet . Get scrubbing bubbles. Kill 99. 9 of germs and destroy grime. With scrubbing bubbles for 100 problem solved. At your core. Trubiotics a probiotic from one a day naturally helps support both your digestive and immune health by combining. Two types of good bacteria. Trubiotics. Be true to your health. I would like to share what im thankful for as we come closer to thanksgiving. Im thankful to my family, and [ applause ] here we go again. This morning a prominent analyst lowered the boom on apples earnings estimates, citing checks that show weak supply chain orders for the companys new iphone 6s. Im always thrilled to see any Research Department do any field work on a real company. This Credit Suisse report sure sounds authoritative in the suggestion that the earnings estimates for apple could be too high, based on their own channel checks. Their estimate makes sense if this new iphone is truly not selling as well as people think. The key line, and i quote, downward revisions anticipated becoming sooner and deeper, end quote, makes you feel mighty uncertain if you own shares of apple. Im sure many investors will because while slowdown was expected, the Credit Suisse piece gives you the impression that other analysts will get on board and start slashing the estimates for apple any minute now. Its ironic that this report comes out on the same day when apples ceo tim cook in a european talk basically pronounced the pc dead, saying why would anybody buy a pc one anymore . I dont know, i just bought my daughter a beautiful new mac to replace her heavy one. She loves the features. Was that wrong . Anyway, ive said people should own apple, not trade it. Ive also told you that frequently analysts will make these calls based on negative channel checks and this kind of research has caused people to dump apple stock only to buy it back later when the stories turn out to be wrong or the narrative changes or orders came roaring back. In short, judging apple based on these channel checks from its suppliers has tended to be a bad mistake. And i find this particular channel check pretty hard to swallow, given that we just heard from three crucial apple suppliers, and they each strong. Now, no company is allowed to talk about apple specifically. Apple actually for bids its suppliers from mentioning apples name lest they use the business. Yet you know from their body language that theyre talking about apples. If you put great credence in this Credit Suisse report, you have to believe theres been a dramatic decline in iphone orders in the past ten days, or maybe all three of these companies are dissembling. I know that many calls based on Similar Research have turned out to be wrong over time, which makes you feel a bit jaundiced about this one. My conclusion, look, you can sell apple if you really want to. But you have to ask yourself, will you be able to buy the false read . I say, why not just hold apple flew this decline . And recognize just how wrong is kind of trading call has been during one of the greatest multiyear stock rallies in history. In other words, you dont try to game apple. You just try to own the darn thing. Sir. Im your air first rep. This is my son. Before he asks this question, i want to give you a quick story. On the 28th of june, he asked me, dad, ive got a little over 5,000, can you buy me some shares of google . Couple of days later i bought it. On the 18th of july i talked to him while he was in basic training. I said roar that google stock is up at 671. Well done. Thats what its about. You had a hunch, you did the work. Im sure you use the product. Thats what its about. Thats why i like index funds and individual stocks. Sir. I have a long four years with that being said, i was wondering if google is going to be able to weather the storm of ad blocking campaigns against it. Four years from now when i graduate in the army, will i be sitting on a lot of capital . I think google is unique in the sense that they and facebook both have products that dont necessarily arent as easily blocked, so to speak, and can be embedded. I think that google is a terrific company. Its very inexpensive. And i make the joke about it for people who understand f. A. N. G. Facebook, amazon, netflix, and google amazon, very expensive, google, also known as alphabet now, not very expensive. I think youll be fine, a great long term situation. I would be doing exactly what youre doing at your age. Thank you both for your service. Thanks for having us. My name is collin parker. Im from warsaw, indiana. Go pros shares have been struggling recent. I would love to hear you take on the future of the company. I think the problem with go pro is they became too commoditized. The last iteration didnt take the nation by storm. If you go through their Conference Call, they were very, lets say, they remonstrated about not investing enough money. Youve got to invest. Apple, own it, dont trade it. Hold it through this decline. When is the next time you can buy the stock at a lower level . You want to play that game . Not me. Much more mad money ahead, a Company Providing innovative vehicles. The stock rising on organic food. Milk, plantbased alternatives. Can it keep surging higher . I have an exclusive with the ceo. Plus a special is a lawsuit to the troops edition of the lightning round. Stick with cramer. [ applause ] veterans come to us as very they know how to succeed. In many places in the military theres great training that applies directly to the sort of jobs that we do at brunswick. The disciplined way of thinking, the style of working, the ability to work in teams, will work in any business. Thats why weve worked so hard to hire veterans. The beast was as long as the boat. For seven hours, we did battle. Until i said. You will not beat. Meeeeee greg. What should i do with your fish . Gary. Just put it in the cooler. If youre a fisherman, you tell tales. Its what you do. If you want to save fifteen percent or more on car insurance, you switch to geico. Its what you do. Put the fish in the cooler to truly feel healthy on the outside you have to feel healthy. At your core. Trubiotics a probiotic from one a day naturally helps support both your digestive and immune health by combining. Two types of good bacteria. Trubiotics. Be true to your health. I asked my dentist if an electric toothbrush was going to clean better than a manual . He said sure. But dont get just any one. Get one inspired by dentists. With a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean. Oralb know youre getting a superior clean. Im stationed at kuwait. And family in newark, new jersey. What do you do with the stock of a high quality, offroad Vehicle Company that makes snowmobiles in a year where were in midnovember but it feels like summer . What are you going to do . Thats the conundrum of polaris, with a stock thats down to date in part because key markets like agriculture and energy are in pretty dire straits and in part because imports from foreign competitors are cheaper, allowing them to take some share from polaris. That said, shares plunged more than 10 in a single session. This seems way too much punishment for me. Lets talk to scott wine, chairman and ceo of polaris industries, as well as a former supply officer who served in the navy. He happens to be in town because hes honored later this week by the iran and afghanistan veterans of america. [ applause ] i knew you have adversity, but you start out in your last Conference Call with arthur brookss notion of the strong correlation between happiness and success. Youre a different kind of executive. Why did you start with that . If were going to get polaris on the right track, thats how we run polaris, to create opportunities to make a difference for everyone in the country. We have a terrific audience here today in honor of all veterans. You did not sit in your Conference Call and say, woe is me, the dollar is too strong, we cant compete. Its more about how your team, and you always talk team, is this jam. We have the best team in power sports. Hands down we have the best team, which includes several hundred people that served in the military. We believe in hiring veterans, 5 of our u. S. Workforce. We dont make excuses. We deal with reality. We dont come out here and talk about how the dollar helps us in 2011 and 2012. Right now when were trading at multiples we havent been at since 2009, probably a Good Opportunity for us to get things going. You do talk about global slowdown, youre worried about rate increase, there is a strong concerns. Im not saying theyre excuses, but youre saying theyre concerns. Youre also worried about power sports growth moderating. But isnt this something we all want . Well, we never want moderating growth. We want to grow as fast as we possibly can. One of the core leadership tenets i have, that i learned in the military, is you deal with reality. You assess the situation. When i talked about the slowing global economy, were assessing the situation. With u. S. Gdp at a point and a half in the third quarter, thats not a strong environment for us. Were committed to making growth happen. We know other countries are trying so hard to take care in motorcycles. Their products are oftentimes inferior. Theyre able to come in well under the prices that you make because you have most of your plants in america. What are you doing about imports from japan, where they debase it to the point where it makes it hard to compete in america . I have tremendous respect for r japanese competitors. We know how to play that game. I will tell you that our motorcycle business was up only 154 in the third quarter. Retail was up 60 . So we know how to play this game. I think it starts with great products. And i daresay this is a beautiful product. Whats great with all of these young men from west point here is that the indian scout was the most popular motorcycle in world war ii. In fact it ultimately is the reason we were able to buy into the business so cheaply, it went out of business, the Indian Motorcycle company shifted all their production to the war effort. But also i think its important to point out, youre really not losing share in this country, for your overall product, despite the weakening currencies that you fight against. Its good that you point out market share. We talk about slowing growth. Ill remind you our slowing growth was still up 12 in the third quarter. Right. We gain market share in each of of our product lines. Motorcycles probably the most. But even in the most competitive aspect, the side by side business, we still continue to gain share. And youre totally among term. I like the fact that youre doing homework, opening plants, expanding. Youre not thinking about the idea that maybe the world is less confident. Youre giving them the equipment them they want, and theyll buy it. Transformation, to serve our customers better, higher quality, shorter lead times. Ive never seen your stock this cheap. Its way too low. Were here to fix it. Thats scott wine, chairman and ceo of polaris industries, i hope you use their stuff as much as i do. The stock is dirt cheap. Stay with cramer. [ applause ] to honor 240 years of standing ready, to be the first to defend freedom around the world. Marine corps. Start the interview with a firm handshake. Ay,no dont do that try head shoulders instant relief. It cools on contact, and also keeps you 100 flake free. Try head shoulders instant relief. Im stationed in kosovo. I want to give a shout out to my family, friends, and girlfriend. I love you all, have a great holidays. Please remember that with the fed poised to raise Interest Rates, its time to circle the wagons around the powerful secular Growth Stocks that dont need a strong economy. Take white wave foods. The maker of organic milk and plantbased nondairy alternatives. They had a stellar quarter and bottom line estimates. One of the few companies this quarter that did everything. The stock jumped nearly 5 yesterday. It gave a little pull back. I think its a great buying opportunity. The ceo, mr. Engels, welcome to mad money. Youve got to talk about the last two acquisitions, youve got to talk about what youre doing in yogurt. These seem big to me. They are big, jim. Before we get there, i want to give a shout out to these greatly young men and women who dedicated the best years of their lives to serving this great country and defending this country. Thank you all very much. [ applause ] thank you guys, absolutely. Period in the food business that has a number of powerful trends going on inside of it. Youve got national organic, youve got a move to diversify liquid and other protein sources. There are alternatives that are developing to dairy that are popular with consumers. And really, wallaby and vega play on those two trends. Wallaby is the leading yogurt in the natural and organic chain. It builds on what is now across our business a 200 million business. Theres a tremendous amount of diversification going on. Were very excited about wallaby, its off to a great start. The nutritionals business and the protein supplement business has really been a dairy business. There are a lot of consumers, particularly women, who are looking for an alternative thats got great nutritional gains, also gives you six servings of protein in every product. This is a business thats been growing. Its got fantastic p l. The opportunity to take this set of products i think into a and this brand into a very broad set of opportunities. If you think protein, you think shakes, so preprepared shakes, 60 of the business is ready to drink. Great opportunities. Somethings happened in the last two quarters. A lot of people thought you were tied to whole foods. Tied to mass market. I see more aisles in traditional supermarkets with really more foods than a traditional company. Absolutely. Horizon, silk, they were among the earliest brands to move out into the traditional mainstream retail, because theyre really big, they created the categories. These are products that by and large live in traditional retail today. In terms of our total company, were in the single digit territory in terms of our Natural Channel sales. Were really a mainstream food company in terms of brands. We run big brands that we market to consumers. I look at snacks, and i think youre this much in supermarkets food. Its more glaring every time i see a Quarterly Report from the old guys. The consumer is changing. The consumer wants stuff that is less processed, where theyre shopping on the perimeter. They want alternatives to traditional categories, as they seem more plantbased proteins that dairy traditionally had a lock on. Theyre looking for stuff thats not processed as much. What youre going to see from us is a continuing effort to find brands to add to our portfolio that leverage off of those trends. Youre going to see us take our brands and continue to take them to places where we can leverage off of what is great equity. Moving from milk and yogurts to dairybased snacks. Plantbased lines is becoming much more than a beverage business. Yogurt is big, more than 20 of our sales in europe. They have the growth curve in the united states. The creamer is doing incredibly well. Creamer is doing incredibly well. Youre seeing us move with so delicious into frozen desserts. Lots of places where we can continue to drive growth in our company. Are farmers keeping up with you . I know the food chain is still playing to the old traditional guys. Are you able to get the agricultural business to see the future . You know, farmers are the ultimate microeconomic being. They respond to supply and demand and price levels and profitability. So in order to induce farmers to produce organic milk, you have to give them a margin, higher cost production. Where we fell down on organic milk supply is when returns in high. Now youre seeing people convert. Same thing in leaf y greens. We harvest it and it shows up on your table in a very short time. In this supply chain, theres a limited number of places that can grow it. You have to be on top of this supply chain. People will convert. You sure are doing it. This was a fantastic quarter, best in show. This is the biggest trend in food. And this is the best company at it, white wave. Mad money is back after the break. [ applause ] were proud to hire veterans into our company. We look for leadership, management skills. You have to be able to confront competition and overcome challenges. The application of those invaluable to a company like us. Phil oh no. under his breath hey man hey peter. unenthusiastic oh. Ha ha ha joanne . Is that you . Its me. You dont look a day over 70. Am i right . Jingle jingle. If youre peter pan, you stay young forever. Its what you do. If you want to save fifteen percent or more on car insurance, you switch to geico. You make me feel so young. Its what you do. You make me feel so spring has sprung. Janet . Cough if you can hear me. Dont even think about it. I took mucinex dm for my phlegmy cough. Yeah. But what about mike . It works on his cough too. Cough it works on his cough too. Mucinex dm relieves wet and dry coughs for 12 hours. Lets end this. I know blowdrying fries my hair, but im never gonna stop. Because now ive got pantene shampoo and conditioner the prov formula locks moisture inside my hair and the damage from 100 blowdries is gone. We really appreciate you out there. Booyah. My kids are in elementary school, learning so much for you. 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 in the market. Thank you for looking out for the regular guys out there. Im trying to teach people to be better investors. Thats my goal here. Great to hear you voice and to know youre there for us. [ bell ringing ] it is time for the lightning round. You say the name of the stock. I dont know the calls or the name of the stock ahead of time. I tell you whether to buy or sell. When you hear this sound [ buzzer ] then the lightning round is over. Are you ready, skeedaddy . Lets hear it. Im victor from new jersey. What do you think about stryker . Very interesting. I do prefer zw more than striker. Andrew from new jersey. I wanted to know what your take is on johnson johnson. Good and going higher. My travel trust sold it too soon because we decided we wanted to have more with allergan. But j j is okay. Quick question for you today about merck. What are your thoughts about merck today . Ive got to tell you, they have that extra growth i like to see. I dont like the product profile as much as j j. Ben from massachusetts. Where do you see unilever headed . I like them, theyre on top of things, got the emerging market going very well. I think that stock is going up 10 . Booyah, jim, john mccarthy, jupiter, florida. Whats your opinion on Goldman Sachs . I love it, are you kidding me . Its ridiculous. I think it goes to 210. What are your thoughts on china mobile . The communist party takes too much control over stocks. Im not recommending any chinese stocks after the most recent downturn. Andrew from illinois. Whats your opinion on diac corporation . Oh, man. That is just a tough one. Search engine from china, baidu . Thats probably one i would love to recommend, but because of this most recent downturn, i do not trust baidu. I have to be a very tough guy on these chinese stocks after what happened this summer. That, ladies and gentlemen, is the conclusion of the lightning round. [ buzzer ] announcer the lightning ameritrade. Americans. 83 try. To eat healthy. Yet up to 90 fall short in getting. Key nutrients from food alone. Lets do more. Add one a day mens. Complete with key nutrients we may need. Plus it helps support healthy Blood Pressure with vitamin d and magnesium. One a day mens. Bring us your aching and sleep deprived. Bring us those who want to feel well rested. Aleve pm. The only one to combine a sleep aid. Plus the 12 hour pain relieving strength of aleve. Be a morning person again with aleve pm. Happy anniversary dinner, darlin im messing up every dish, pot, and plate. To show my love. Tada now even more concentrated. Just one bottle has the grease cleaning power of two bottles of this other liquid. You still got it, romeo. A drop of dawn and grease is gone. This costs you money and runs on gas. This saves you money and runs on calories. Save the car for rainy days and long road trips. Biking is better for your body and your budget. Welcome back to our special salute to the troops show. This is a market where we need to start accepting the inevitable. Its become very clear that the Federal Reserve has no choice but to raise Interest Rates. As i said repeatedly, rate hikes are not good for the vast bulk of the stock market. Im trying to prep you for this. But one sector does better when the fed tightens, and thats financials. As the rates go up, the banks make more money. Tonight were going off the charts with the help of tim collins. Colleague at realmoney. Com. Take a look at this daily chart at the s p financial etf which contains all the big bank stocks. Collins sees one that could be at risk here. Ever since the market bottomed in late september, short term tenday moving at the average, acting as a floor of support. Thats the blue line. Heres your floor, okay . However, collins is concerned that after yesterdays selloff, little thing right here, it could be in danger of breaking down below this moving average, which wouldnt be the end of the world but it would do some damage to the bullish narrative. From midjuly to midaugust, this traded in a very tight collins think this level has become a pretty powerful fueling of resistance, one thats only a half a point above where its currently trading. We could be bouncing off this and not get through it. Something else hes worried about, look at the relative strength index, the momentum indicator at the top of the chart. Since midoctober, the rsi for financials has been bouncing around in a pretty tight channel. Right now it looks like it could be very close to breaking down. And if this relative index breaks down, the big bank etf could follow it lower. Meanwhile, the commodity channel index, thats called the cci at the board, which measures whether securities are overbought or oversold. The xlf has been overbought for nearly a month now. After yesterday, this index is still elevated. But its fallen below what we would consider overbought level. We might think thats a good thing. Interest is drying up. Of course none of these negatives have actually come to pass. But if they do, collins thinks it could end up trading sideways for some time. You have to be price sensitive if you buy it. In short, its not looking as hot as i expected when i asked him to do this chart. Given the fact that i think the banks are about to become some of the sexiest stocks imagine building. When you zoom out and look at the xlf weekly chart, then it starts to look a heck of a lot more positive. This is a picture of what collins likes. He points out its moving steadily higher for two straight years until the big selloff last august, rate scare. However, after the decline weve seen a rebound. Collins thinks its made whats known as a cup formation. You can see the cup, pretty obvious. Thats the first component of one of the most bullish patterns in the chart world, the cup and handle pattern. Now, to get the cup and handle, sways. You can pull back which would create a sideways handle next to the cup thats already in the chart. And remember, based on what we saw in the daily chart, thats exactly what collins will expect to happen. If this etf trades sideways for a while and creates that cup and handle pattern, collins thinks it could go down to 28. That represents a 14 increase. Thats pretty significant when youre talk an etf made up of the biggest banks. Financials are the largest component of the s p 500. This wouldnt be the gain you would get even with a fed rate hike. In the short term, the chart suggests the major banks might need to consolidate for a while. Lower term, he sees the group headed higher. I agree with his long Term Forecast because the moment of fed raises rates, the earnings power for all these bangs gets much stronger. If collins is right in his interpretation of these charts, the big banks could trade sideways, you could go lower in your future before roaring higher long term. I think you need to buy any weakness in this group. It will be a gift. People will Start Talking about what happened when we get second rate hike, then the third one, then the fourth one. While it will be very tough for a lot of different sectors, the majority of sectors, frankly, it will be perfect for the banks. I would use this for the bank of your choice or the xlf itself. Stick with cramer [ applause ] the personal qualities of service, of collaboration, of a sense of discipline, that goes a long way in business. My First Leadership position was when i was in the navy. I was navigator on the bridge of the ship. And what i learned so much in the navy was units of leadership. You can have a war ship with 300 people, but it operates in small units of leadership. And so you really observe this incredible sense of welloiled fighting machine. Agious disease. It can be especially serious even fatal to infants. Unfortunately, many people who spread it may not know they have it. Its called whooping cough. And the cdc recommends everyone, including those around babies, make sure their whooping cough vaccination is up to date. Understand the danger your new grandchild faces. Talk to your doctor or pharmacist about you and your family getting a whooping cough vaccination today. Americans. 83 try. To eat healthy. Yet up to 90 fall short in getting. Key nutrients from food alone. Lets do more. Add one a day mens. Complete with key nutrients we may need. Plus it helps support healthy Blood Pressure with vitamin d and magnesium. One a day mens. Theres moving. And theres moving with move free ultra. It has tripleaction support for your joints, cartilage and bones. And unlike the big osteobi flex pills, its all in one tiny pill. Move free ultra. A couple of iconic names doing very well, ge 330, still very inexpensive. Mcdonalds, well be talking to the ceo tomorrow. A lot of retailers reporting, macys, jc penney, nordstroms. Every single one of these stocks is going up. Thats wore isome because when the actual numbers come out theyll have to be cut and people will say, why did i bother to buy these stocks . The weather is so warm, the inventory is worrying me. On veterans day tomorrow, please join me and take the time to say thank you for all the veterans do. Theres always a bull market somewhere and i promise to find it for you right here at mad money. Im jim cramer. I will see you tomorrow. [ cheers and applause ] jeff today on flip my food,