Booyah!!! Special offer for Yahoo readers: For less than $3 per week, you can get full access to Jim Cramer's intraday market commentary and stock trading strategies - sometimes before he says them on TV! Join now.
Can we just have one piece of evidence, just one piece, that there is a pulse in China?
I know that many of the coal, mineral and machinery stocks are historically cheap, but without a reversal in Chinese fortunes there's no place to put the stuff.
But each day the trade seems to broaden and encompass more stocks. Today we have Yum! Brands YUM going higher, which is chiefly Kentucky Fried Chicken, which is chiefly in China. You have to like the action in Starbucks SBX , where the a Bernstein analyst is saying that Asian sales are coming back and that could propel the stock higher. It hasn't been Asian weakness that has caused Starbucks to underperform, it's been Europe, but that call out does matter.
You want encouraging? Take a look at Joy Global JOY , where the marginal buyer is China as you need Joy Global to get minerals, particularly coal, out of the ground. That's a welcome sign for a cheap and well run business.
Caterpillar CAT bounced off some lower levels and seems to be on the upswing once again. What a remarkable comeback for a stock that won't stay down, especially given that it bought Bucyrus, which is in the same business as Joy Global.
Or how about the fact that Action Alerts PLUS stock Coach COH didn't get clocked despite Burberry BURBY telling a woeful story about China?
Freeport FCX , the copper company, won't come in. Cliffs Natural CLF , the iron ore company subject of multiple downgrades, including just yesterday by Goldman Sachs, continues on its rampage. You've for a quick move to $41 from $3 on your hands.
Now, all of this is happening in an environment where the Baltic Freight Index, the best way to monitor world trade, continues to sink. I find it hard to believe there could be a turnaround any time soon because of that number. Copper inventories in China are extremely high. Their exports to Europe are coming down and Europe is 20% of their business.
There is nothing cooking in China, nothing whatsoever except decent Macau casino numbers.
We can't even hang our hats on the Chinese stock market which, while up for a couple of days, failed to perform last night.
Why am I pointing all of this out? Because stocks do bottom ahead of turns. They bottom well in advance. They are saying you MUST ignore the current data and focus on the future.
I think we can play this China's-about-to-act game for ages simply because there is ample room for them TO act. All that said, if you ask me what's the most vulnerable part of this market, it is the Chinese plays.
Back in 2009 I went so far as to buy a Chinese market derivative because I was so confident that the Chinese stimulus would work. It certainly did. And why I am by no means a believer that China's going to crash, I do think that without a credible bit of news, the rally is suspect and I think that the Friday buy/Monday sell trade has gotten a little old as it just doesn't seem that they get the urgency in China or they are leaderless enough that it just doesn't seem to matter to them.