As we did earlier today. Only the dow inched off, s p slid. 20 . Nasdaq advanced. 04 . Take this morning, im walking out of the New York Stock Exchange after squawkon the street, going in at the exact same time is the comanager of my Charitable Trust. She sees me and said what do you think of the decline in aerospace here . I said, it makes no sense to me. We know business is trick. She couldnt think of any reason for the weakness either. I said, maybe its the failed sale of b. E. Aerospace. They make seating and galleys. Not that long ago, the company decided to explore strategic value. We know there has been tremendous takeover lately. When i read that b. E. Is going to break itself up rather than sell itself, i figured that maybe someones using this news to make the case the aerospace cycle has slowed down. B. E. Was down 5 when we saw each other. It did reflect poorly on the airline business. At least as of that moment. She said, how about buying United Technologies for the trust, which is down for the sector. I said, great idea. Give them a book of business, which includes residential construction, heatinging ventilation, airconditioning known as hvac. That is finally turned around. Steph opined to me h. D. Supply, a very good barometer of construction reported this morning and told us business steadily improved and architectural billing, remember, United Technologies makes elevators besides air conditioners has stayed strong. Coin cut the reserve ratio last night. So what do we do . We took it altogether. And we brought some United Technologies for the Charitable Trust. Why does this exercise matter . Why am i going through the nittygritty of why you pull the trigger . Because i think that kind of discussion, frankly, unfortunately, is pretty rare these days. Now, we like to explain our moves in real time the subscribers, we laid out this logic pretty much as i described before we pull the trigger. Typically, i see the opposite happening in this market. People want to boy United Technologies or any other stock when its hot, not when its not. They dont want to use the price break to scoop some up. They usually believe any pull back is just the beginning of some roar ren discuss selloff. Sell, sell, sell they will look like idiots for buying into this initial weakness. Now, ill admit, its certainly a possibility. The rational for United Technologies may notplay play out. Maybe we catch a downdprad tomorrow, sell, sell, sell, by some firm. Wab it was weak. Sadly, thats been known to happen. Whatever lets say the whole men felt since 2009 can be summed up in a couple words. Every decline is a selling opportunity except the vicious ones, which are panic opportunities people simply dont believe a discount is the. A discount they see in the supermarket, buy one, get one. In the mall, theyd take it. But not when it comes to these expensive pieces of merchandise i absolutely late this thinking. If you think a thesis is intact for a stock, you should be a buyer, not a seller. There are some going out of fax. That could be different. We know, for example, this software is a service fame got simply too high, too hot. They were crushed by a deluge of ipos posing and these companies were all valued relevant for the each other, not the overall market and whenever thats the case, there is always the possibility of a real hammer. Theyre in the vacuum, air cams out of the vacuum, however, its a mistake to extrapolate the software as a service base to the rest of the market. When you are dealing with high Stock Companies that arent expensive relative to the average stock and the s p on an earnings per share basis, not some dock a maim my cocamamy measurement. Its generally a buying opportunity and i think if you really like the stock, you should take it. I use the same lodgeic we applied to United Technologies, pretty much every day on this show. I look for price breaks and Good Companies and run toward them. Not away from them. Of course, you dont boy all at once. Look, i love to scoop up new sects for the trucks and better level, i do not fear lower levels. I like sales, have cash on the side lines. Thats the lesson. Now, it might not go down from here. Maybe the trust doesnt get a chance for i bog lower. So be it. Got some in. That said, not all discounts are created equally. Sometimes they can be agonizing, for example for the trust, we started buying General Motors too early. I thought the worst was over. However, we leave some room in case the decline can be prolonged. When gm came down to 39, i told everyone it wasnt last to buy. Ied a been waiting because i figured the terrible incidence were lastly fully discounted by a lower stock price. More important, it had become a yield after 3. 5 . Let me tell you i say every time i saw cnbcs phil lebeau on air talking about gm i cringed. I knew the papers wouldnt stop hammering the company. Of course the lawsuits are ugly, no doubt about i. That said, unless you believed these lawsuits were going to be like the asbestos suits or the oil spill that slashed bps dividend, neither of which i think are good comparison, them that was your chance to buy gm. It rallied 10 . Maybe that cans doesnt come around again. Of course, you cant always nail the bottom. I like rite aid very much. So when it delivered its earnings last week, i said to keep buying it. The stock still hasnt settled down. That hasnt bothered me. Rite aid is a longterm story, yet, judging by my twitter feed, many of you are furious. You need to ask yourselves something. You need to ask yourself if you are in the stock for a quick pop, you are not going to get that. For bigger long haul, right . A long haul, long term, which is why we recommended the stock at 13. I like it for the latter. Heres two words you never want to hear. Stay patient. Some of the decarolinas are horrendous but viempblt i stayed faithful to facebook because while many internet stocks had become super expensive, facebook is not that pricey, based on actual earnings per share. When earnings estimates for the out years, lets say 2016, facebook, for example, is very different from athena health, whose ceo we spoke to last night. Remember when you are valuateing gross store, you have to go out further than this year. Athena sells 17 times 2016 earnings estimates, even after its huge decline. Facebook, on the other hand, sells for roughly 25 times 2016 numbers. Given that facebook halls had far superior growth to athena, along with a host of all the other internet ecommerce and software and service plays, i wanted to boy facebook on weakness for the Charitable Trust and i did. Others said, listen, theres got to be something wrong, jim. To me the only thing wrong was the stock price, thats what was wrong and it rallied 4 is. 6 . It doesnt mean nothing will go wrong down the lean. When you break in a high quality stock that no longer is expensive, because its come down, you should do some buying. Let me give you the bottom line, yes, sometimes a pullback has been a hashinger of worst things to come. But the vast majority of decline since 2009 had been the exact opposite, remember that. Often the discounts this market gives you are wrong and one off. The market overreacts, especially in this area dominated by futures, High Frequency trading and ets. The market gives you a chance. And you need to understand that sometimes, sometimes that chance is, indeed, worth taking. Lets go to christian in new york. Jim, i got a position in wendys, it was going up nicely. It took a nose dive. I wonder if this is the chance i need to hang on or get to out . I saw it was downgraded. A lot of people feel it lost momentum. I like to think if it doubles quickly, it has to spend some time churning before it moves ahead yet again. That is the case with yen wendys. My wendys looks darn good by the way. I think as people remodel wendys they go. Lets go to ray in florida. Caller im heavy into the new york teams. A vend the reason im so heavy here im a retired 18wheeled truck driver for 35 years. And i retired about 15 years ago and i have been through lot of the New York Times and i want to know what you think of it. I like the New York Times in full disclosure. A very close friend of mine, i think jill did a fabulous job. I think the franchise is intact. Its a good company. I think the stock can go to 18. By the way, why do i pick 18 . We recommended it around nine and said it can double. Carp spe di em, sometimes discounts arent right. That, my friend, may be a chance that just maybe is worth your taking. On mad money tonight, a company that selects information from hundreds of businesses world wide, can their data deliver dollars for you . Then don draper may have antiing deal. I have a advertising price that makes it look like small potatos. Plus, are you in good hands with allstate . Stay with kramer. Oh my god look. You need to see this. Show em the curve. Do you know what this means . The greater the curvature, the bigger the difference. [scifi tractor beam sound]. Sucked me right in. Its beautiful. Gotta admit one thing. Cant beat the view. Introducing the worlds first curved Ultra High Definition Television from samsung. Could save you fifteen percent or more on car insurance. Mmmhmmm. Everybody knows that. Well, did you know that old macdonald was a really bad speller . Your word is. Cow. Cow. Cow. C. O. W. E. I. E. I. O. [buzzer] dangnabbit. Geico. Fifteen minutes could save you. Well, you know. Let me tell you about a stock, a stock quietly moving higher for months. Nobody talks about this one. And it now sits a few cents away from its 52week high. Im talking about allstate. All. Its a property and Casualty Company has a smaller Life Insurance business, sells retirement investment products. I use them. Theyre the ones that use president david palmer in their ads. Aka dennis hayes. I go through the acquisitions why Companies May be worth a heck of a lot more than we have been paying for them. Bailsed on the prices that inquirers, not portfolio buyers, real buyers, i did you a disservice. Protective life bought for a 34 prem dwrum. That tells me the whole insurance based not the whole play, im talking about the whole group. Maybe it needs to be revalued upwards, including allstate. So tonight, were going off the charts on this one, i love lying stuff because its so clear that, technician, founder and senior strategist explosive options dot. Net. They only recommend stocks that look good from a technic alper specttive and a quantitative perspective and fundament u fundamental perspective. Lang thinks allstates chart, pulpitude saying you are in good hands with allstates stock. Everyone is tired of asking, its just a bone spur. All right. Let move past it. Anyway, what exactly is so great about allstate . Why is the insure ear giving you a 10 return . Its not done take a look at allstate another daily cart. Will you . Oh, picasso. This picture is about a thousand words, its about two words, staleing power. Ever since the les in february allstate has been slowly, surely, cloiming to higher levels. In fact, this is a textbook bullish chart. Thats what i leak about it this is what you are looking for allstate has been making higher high, lower lows. That is a classic seen you are looking at the chart of a stock that halls much more upside in front of it. Its not just that allstate is making techbook bullish moves here. Lang points out the volume is indicating big institutions could be buying this one in a major way. We say a lie detector when it comes to the chart, high volume means the move is telling the truth you see volume spikes, the stock spikeing. A low ride means it could be misleading n. Allstates case is, we see the boy is specked up when the day is strong. That again, techbook of what big money is probably doing. Its telling you what big money is doing. Then there is the williams percentage r oscillator. Thats a tools developed by commodities trader larry williams. Measured by the securities overbought or oversold. In the case of allstate, the stock has been an overbought territory since early may which ordinarily you might think would be a yellow flag telling you shares have come up too far too fast. Could be do you for a pullback. Heres the thing, allstate has pretty much stayed overbought ever since, when a stock gets overbought and stays there, we switch directions about it. Lavpg calls it embedded. Thats a word that said, this is a good sign its lasted so long. Its a sign a stock can roar higher it probably wont pull back. In other words, when the stock stays overbought, gets embedded, for a month like allstate, its positive. Last but not least. Lang likes that allstate has been one of the best insurers, we are including met life prudential and lincoln, showing terrific relative strength to the entire group. Now. Lets take a step back and look at allstates weekly chart. This picture puts things in perspective. Here we see a stock basically making a chairman malstyle long march higher, for more than two years. Another chart text b. C. For you. In fact effect allstate has more than doubled since early 2012. You caught a fabulous buying opportunity and pulled back to its 50week moving average. I love. That i love that time frame. But more important, look at the relative strength index at the top of the chart here. This is an important momentum indicator. Lang points out something crucial here. Allstate has climbed up to levels we havent seen since may of 2013. Wow, since the early 2013, get this, the last time it rose this high the stock caught an enormous rally, basically running from 40 to 50. You can see it just took off. Now, what we know is that the rsi is, once again, at the same lofty levels. That tells larpg all state could be prepared to rock it higher. Just leak 18 months ago. In other words, its not done. It can turn up. Thats not all. There is more. The moving average convergence divergence or mack dline, they use it to change the stock changes trajectory. Back if early march, the macdd as the condesending call it name what was known as a bullish crossover. Thats when the black line crosses above the red. Again for the cart watcher community out there this is a totally textbook single. It may say buy, buy, buy. The truth is the mackd indicator right after bullish crossovers leak allstate had months ago. They often have tremendous staying power. There is a beautiful bullish crossover right there. Thats just a gorgeous one. Very rair rare that you get that. Put it altogether, langleys says allstate may show pretty much every single sign a technician would want to see. Allstate is a very low run company, its bunting up a low Interest Rate voirmt not favorable to the insurance. They benefit from higher rates. They take your premiums and invest them in bonds. The good news is it seems like rates may finally have stock going lower. They now seem to be making tear way back up again, which is what youd expect when the u. S. Economy is improving and inflation rises. Even with low rates, allstate has been able to combat the weakness by raising your premium. Remember, there is that protective takeover from last week, which caused a low valuation t. Group has little sponsors, nobody cares about these. I care about making money you know a low growth rate. Heres the bottom line t. Charts as interpreted by bob lang indicate that allstate is a thing of beauty. A stock with some of the strongest charts out there right now. I agree, allstate is absolutely worth owning. Personally, id like to wait for a pullback. Judging on what weve seen here, i dont think we will get one. After the brake, ill take e try to make you even more money. We have been talking a lot about that pun that im sick of hearing, urge to merge. The fact that right now we are seeing a rising tide of consolidation in a whole range of industries. All sorts of companies seem to realize as much as the stockmarket may have run. The stocks and competitors are worth a heck of a lot more to them than they are to the pension fun, to the public fund, mutual fund, you know. I planned all this out. I planned out how all the merger in activity means we have to do some new revaluation evaluations. We havent won the war for taking over targets in industries where the deals are coming hot and heavy if the fundamental also are good. I promise you, i would redouble my efforts to find new names. But tonight i want to take a different tact. I want to talk about a failed deal im referring to the merger between omni com and publicist. It would have created the Largest Advertising Agency in the world. It was in the works since last summer. It fell apart two months ago. They couldnt come up with terms acceptable to each other. Why is this important . I think the failure of omnicom publicist is probably the single best thing that could have happened for Interpublic Group. Ipg. The 8. 3 billion company, for those of you who watch mad men Interpublic Group is the eric zorn him always trying to buy sterling cooper on the show. They have a host of other brands, including low deutsche, mullen and many others. With the collapse of the merger, i think its takeover target number one. Buy, buy, buy think about it. Omnicom are roughly the same saz, 18 billion and 17 billion respectively. Both companies wanted to bulk up their scale in an industry getting increasingly competitive. Banks take the Data Collection made possible by the internet and companies you see that do internet commerce. Now omnicom publicists blew up. You have not one, but two advertising agencies i think are desperate to make an acquisition. In this viernlgs i would be surprised if one of them doesnt try to buy Interpublic Group have lal louia why . Because interpublic is a cash cow. And with that 8. 3 billion market cap. Its slowly digestible for a omnicom or a publicist. You know i never recommend a stock solely on the basis of takeovers. We only buy the stocks of companies with strong or improving fundamental also. Ipg may look like a terrific takeover target. Believe me, the business is deteriorating. Then the stock could end up going much lower. Who wants to buy a deteriorateing company . I never would have brought it up as a takeover play if i didnt like precisely what we are seeing with the fun