Market would open. A decline that was unrealized and then tossed aside when the day dawned and grew light with the dow ultimately gaining 257 points today. S p climbing 1. 1 . And the nasdaq finishing the same, up 1. 1 . The markets now up close to 4 for the week, which means if we can hold at these levels, this will be the best week of 2016. I know its hard to believe that someone who is regarded as the enemy of the stock market last night can be embraced as an old friend by midmorning. But i want to explain, just put it in plain english so that you can understand whats happening here. To begin, though, you have to get into the heads of the people who actually bought stock, people who committed capital today. Thats whats often the key to figuring out a rally. Thats how youll know whether insane, but then of course turned out to be anything but. So let me list the types of buyers, the people who came in with real money, why they were motivated to do so, and how they moved the market. The first buyers, the people who have been waiting for this gosh darned election to end already. These are investors who recognized that the nastiest election in ages simply had to finish playing out before they could commit their capital. There were just too many questions. Too much rancor. Too much plain old confusion and before pulling the trigger without knowing the results. I want you to think about these people as agnostic buyers. They were going to buy stock no matter who won. They simply wanted to be sure the market wasnt going to crash after the results came in. It pretty much did crash for traders who sit around in their pajamas at night and trade the futures like idiots. The people who sold everything last night, the people who said of worm spit, a phrase fdrs first Vice President used to describe that distinctly subservient, suboptimal job. Ill railed against these sell everything folks for months, but obviously it doesnt matter. The p. J. Guys, they dont listen to anything anyway. What are those guys doing with their dr. Denton feet pajamas . The second group of buyers, those who wanted to see a smooth transition. They didnt care who won so long as the victor was magnanimous and the loser was gracious, transition of peaceful transfer of power to continue. The smooth transitional cohort got an instant onetwo dose of gratification first with trumps victory speech at 2 30 a. M. , which must have really driven those p. J. Short sellers crazy, and then the second with hillarys concession a little after 11 00. These buyers really did everything they bid everything up. Did you watch it during hillarys speech . They bid everything up first when trump wasnt threatening to put hillary in jail. To send her back to yale, where she went to law school. The third set of buyers . Those who see in donald trump a businessman who will cut taxes and borrow a ton of money to fix our nations infrastructure. These buyers know trump is comfortable with borrowing a lot of money. Maybe even more than he can pay back, if he has to. So why not do the same with the treasury given the 30year rates are so cheap . The bond market traded today as if trump is going to issue a 500 billion longterm bond to fund bridges and tunnels, not unlike dwight d. Eisenhower. That. The stocks i recommended year, Martin Marietta materials and vulcan materials, were among todays leaders. Plus when rich people get a tax cut, let me tell you something. Rich people getting a tax cut, this is what goes through their head. Hallelujah and they tend to invest some of that money in stocks. Buy, buy, buy. And rich people represent a pretty big constituency in the market. Face it, rich people love it when their taxes are cut, and so they love stocks. Pretty simple. Fourth group of buyers, the people who got this election completely and utterly wrong. No, not the pollsters, who after this election and brexit should have whatever licenses they have revoked. Bunch of clowns if you ask me. Chowder heads even. No, im talking about the short sellers who, after fbi director comey first damned hillary with the weiner emails and then exonerated her days later, felt she was the biggest shooin since Richard Nixons triumph in 1972. Now, if youre idly chit chatting about the pollsters and you took comfort in them, if you liked hillary, more power to you. But if youre a Hedge Fund Manager and you saw those pollster numbers, you would have been really inclined to bet on a Hillary Clinton white house with perhaps a Democratic Senate majority. That would have been the death knell for pharma and banking stocks. A lot of people were having nightmares about what Bernie Sanders and Elizabeth Warren the senate. So these Money Managers made gigantic short bets against both groups. Now, at first if you were betting against whole sectors of this market, you looked like youd be saved by the decline in the overnight futures. I could see the guys in their p. J. S at 11 30, 12 00, saying, well make a fortune tomorrow. But once the smoke cleared and the sun came up, those guys took their lickens. The short sellers had a major horror on their hands. They were looking good on their bank shorts initially because intere were bid up. Woo, trump. However, when we got a magnanimous handoff and a sense trump meant business when he talked about borrowing money to build out americas infrastructure, you witnessed a stunning rise in Interest Rates, which is nirvana for the banks because they pay you little on your deposits but can invest them at very high rates of return with very low risk. Remember, they dont raise your deposit rates as much as they, well, they can make on them. Meanwhile, pharma bounced. Not only because the republicans arent going to rip into the may let these companies repatriate their foreign capital and start merging with each other. Proposition 61, out. So short sellers had to come in and buy all their shorts, particularly in pharma. More on that later and of course the banks. Both groups had what i call rip your lungs out rallies, which brings me to the fifth set of buyers. Those who like the idea that something can get done with corporate taxes to repatriate all that money overseas. More than a trillion and a half dollars, a lot in tech and drug stocks too. That would mean more buybacks, it was never going to happen with a democrat in the white house and a congress controlled by the gop. Sixth group, those who believe that both the predatory nature of regulations and our Foreign Trade partners might have finally met their match. Plenty of our ceos want free trade, but others taking their cue from the likes of dan dimicco, former ceo of steel giant nucor, believe that we need a level Playing Field with our trade partners before we can do better. When it comes to regulation, disrupt the status quo. Hes antiestablishment. And nothing resonates with investors like stopping regulation that hurts our jobs and our businesses. And here im including everything from, according to the people who voted for him, the Affordable Care act and nafta. A seventh group of buyers just found tons of stocks they like today. Weve been harping on those defense contractors. Monster moves. Others want to invest in fossil fuels and feel like a trump epa would be less threatening. Maybe there is no epa. Well, no. Hell probably keep an epa. Anyway, the Pipeline Companies in particular got a green light here. So did the coal toting railroads. Finally there are people who are willing to bet that americans will be more inclined to go out and spend now that this election is over rather than sitting at home ordering that dominos nocheese pizza with banana peppers while playing grand theft auto and watching, i dont know, luke cage on netflix. Maybe people will fix up their homes again, ending the long slide on home depot. The refurbishment trade could be there were enough of these to color the tape positively. To be sure the markets actions were erratic minute to minute. The simple fact is there were a heck of a lot more people who wanted in after this election than wanted out. And a gigantic number of hedge funds who were on the wrong side of the trade and had to reverse their stance. So the bottom line, the coalition of the willing buyers cobbled together to produce an improbable rally. En whole darned election improbable . What a fitting way for it to end. John in georgia, john. Caller yes. My question is, do you believe that General Dynamics is a good stock to own in the Aerospace Defense sector, especially under a Trump Administration . I think General Dynamics is one of the best run companies in the country. This stock did hit a 52week high today. Its up 8, but you know what . Buy southern and wait for a how about larry in massachusetts, larry. How you been, partner . Caller hey, jim, thanks for this mornings action alerts call. Oh, man, we were sweating on that one. It was a full hour. Glad you could join us. Caller it was absolutely valuable during the whipsaw. Look, ive got a soft financial question for a retirement account. Ares capital corporation. You know it. Floating rates. Wide bunch of industries. Yields a steady 10 . Despite a downward rerating since i bought it in 2013 and with the fed beginning to rise and the overhang of congress, eliminated pretty much. Do you like them as much as a slower blackstone . I think we get a little freed up equity market. Black stone does a little bitter. Run by a pretty smart guy. Saw him interviewed by my boss last week. So lets do that. Lets make that switch. Thank you for the kind words and for joining the conference call, which is on a replay. It was really wild because we just sit there and went over the stocks and were really going at kind of like fantasy except it was reality. The 24hour turnaround that caused the dow to swing more than 1,000 points may seem crazy. But when you get inside the heads of the buyers and the sellers, the improbable rally off an improbable election comes to focus. On mad tonight, the new face of washington has drastically changed the outlook for one specific set of stocks. Ill give you the existing landscape. Plus, how long will this postelection rally last, and the warning signs to watch. Well, weve got them just ahead. And remember when we didnt just talk about the election . Those times are returning. Tonight im speaking with chipotle about its legacy and whether it can repair its reputation. Hey, avocado got expensive. I know that from bar san miguel. Anyway, stay with cramer. Announcer dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Yeah,. Hashtag stuffy nose. Hashtag no sleep. I got it. Hashtag mouthbreather. Well, just put on a breathe right strip and. Pow it instantly opens your nose up to 38 more than Cold Medicine alone. So you can breathe. And sleep. Shut your mouth and say goodnight mouthbreathers. Breathe right. I think we can finally get a bigger place. Credit karma. Give yourself some credit. Because im a woman. Do you think im gonna crack under pressure or conquer the field . Defy expectations any day with always infinity. Made with flexfoam. Absorbs 10x its weight. Rewrite the rules. Always. Were going to prove just how wet and sticky your current gel antiperspirant is. Now were going to show you how degree dry spray is different. Degree dry spray. Degree. It wont let you down. [burke] at farmers, weve seen almost everything, so we know how to cover almost anything. Even a rodent ridealong. [dad] alright, buddy, dont forget anything [kid] i wont, dad. Ng, but there is some movement on the eastside overpass. Getting word of another collision. [burke] it happened. December 14th, 2015. And we covered it. Talk to farmers. We know a thing or two because weve seen a thing or two. After Donald Trumps stunning victory last night, coupled with the republican sweep of both houses of congress, were suddenly looking at a very different stock market. This is a new environment, and we need to rerate thats the technical term a whole host of different groups. But the biggest impact of this shocking election is probably in the Health Care Group. Remember, until the returns started coming in last night, Hillary Clinton was considered to be the oddson favorite to win the presidency with a decent likelihood of the democrats taking the senate. For over a year, the prospect of a clinton victory had been weighing down the Health Care Cohort and in particular the drug stocks ever since hillary sent out that infamous tweet about cracking down on pharmaceutical price gouging. That was in september of 2015. Been a long time. From that moment on, the whole health care edifice was living under a cloud with wall street worried about congressional inquiries, executive actions or even actual price controls. Thanks to last nights results, though, those worries have all the republicans are the party of limited regulation and free markets. Theyre not going to crack down on drug pricing because they believe that will stifle innovation. Youve heard that a million times. Hence the massive near 5 rally in the drg today. Thats the nyse arca pharmaceutical index. Granted, the republicans will try to repeal obamacare, which could hurt Many Health Care plays, but the democrates in the senate will just filibuster. More on that for more shows. A Gopcontrolled Senate also means we dont need to fear aggressively interventionist Democratic Committee chairmen. Here im speaking like bernie sand running the Budget Committee or the committee on health, education, labor and pensions, both relevant to health care. Another surprise Political Development last night . In california, the voters defeated proposition 61, which would have prevented the state from paying a higher price for drugs than the department of veterans affairs, and the v. A. Gets the lowest prices of any government agency. Thats another win for the drug makers. Plus after getting beaten down for ages, many of these Health Care Companies have dirt cheap valuations. Competitors, like whats happening with the wholesale drug distributors. We want no part of that. For the segments of the Health Care Sector that dont have price wars, i think we need to get a lot more positive because these stocks have a lot more room to run. In fact, many of these names are so cheap, i wouldnt recommend even if hillary won the election. Thats how much this group has been punished already. But under President Trump, the outlook for the sector, a lot brighter. Of course theres still some headwinds out there. Cvs sold a yesterday after reporting a mixed quarter with truly dismal guidance for next year. Management says 2017 could be a challenging year. Cvs might lose more than 40 million prescriptions as pharmacy benefit managers like express scripts lock out their pharmacies. Ouch. Honestly, much of the weakness seems cvsspecific. The business theyre losing will probably go to walgreens and we told action alerts club members that Charitable Trust holding wba was the real winner here. The people running cvs, they wouldnt have announced a massive 15 billion buyback. I would not dump cvs down here. Let it come a little higher. Other negatives that jump out valeant, pitiful helpless giant of a drug, believe me. Reporting another disappointing quarter, dramatically cutting its fullyear guidance for 2016. Refused to give a forecast for 2017 except to say the numbers are going lower. Hence why valeant lost 21 of its value yesterday. This company has got an ugly Balance Sheet, and i still consider the stock downright toxic. Dont buy, dont, dont, however, theres a lot to like in the rest of the Health Care Space as long as youre careful to avoid the competitive land mines. On monday before the election, lindsey bell from s p capital iq came out with a terrific piece titled taking the contrarian view on health care, where she made some important points. Despite the political rhetoric, bell noted that many subsectors are still doing just fine. The valuations in the group had gotten very inexpensive. At the same time, the dividend yields have been on the rise. In fact, despite the weakness in the Health Care Stocks going industry delivered better than expected numbers this earnings season. So if the Health Care Stocks have become too cheap to ignore, where should you put your money to work . First let me just say that you need to avoid the price war situations, and that includes the drug distributors like amerisourcebergen, cardinal, mckesson. They were all up today, big. So use that strength to scale out, not dump. Scale out of these. Some price competition novo nordisk, eli lilly, mylan. Novo nordisk is really the poster child here. Theyre facing both price competition on insulin and public shame for past price increases on the same darn products. If you own these, reposition. What works, then . For starters, i think merck is one of your best bets. Heres a company thats gotten a lot of good news lately, including for their big comes to nextgeneration cancer drugs, particularly after the public setbacks in the bristolmyers competing oncology formulation opdivo. Merck rocketed up 6 today on the Election Results but even after this move, its only 16. 5 times next years earnings estimates. Solid 2. 7 dividend yield. That is too cheap. Buy, buy, buy. How about pfizer, pfe . Heres a stock thats facing terribly negative sentiment in recent months, but i think the Company Remains a powerhouse with huge Free Cash