Cramer: The Rebound is Real. Now What?

 | May 19, 2017 | 1:04 PM EDT
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Stock quotes in this article:

de

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cah

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mck

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wmt

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sbux

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AMAT

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nvda

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adsk

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crm

Day three and the buyers are everywhere.

Interest rates are going up, which satisfies those who own the bank stocks and gives you hope about rate hikes. Deere (DE) put up numbers this morning that made it clear that its construction cycle has most clearly bottomed and is going much higher, putting a bid under the cyclicals. The oils have come alive over OPEC shortseller bad mouthing, and natural gas has garnered fans because of the heat.

Meanwhile one of the most hard hit sectors besides oil of late has been drug distributors. We have liked Cardinal (CAH) after its disappointment and today Mckesson  (MCK) delivers fabulous guidance and some encouraging discussion about some of its new programs including one with Walmart (WMT) .

Meanwhile how about that delicious breakout in Starbucks (SBUX) for the patient, as we grow ever more confident that the mobile ordering problem is solved and the selloff seems over. Perhaps domestic same-store sales are indeed turning up.

We had the wind at our backs anyway given that Applied Materials   (AMAT) reported a fantastic quarter and talked about how strong demand is for machines to make all kinds of chips from DRAMS and flash-commodities both-to artificial intelligence and light emitting diode semis.

The read-through here was great for everything from Apple (AAPL) cellphones to Nvidia  (NVDA) semis.

Autodesk  (ADSK) , the company we highlighted as the most undervalued tech you have never heard of, seems to have garnered some much needed attention after talking about adding 180,000 new customers. Their computer aided design business powers everything from smart phone architecture to skyscrapers to race cars to movies.

And the stock of Salesforce   (CRM) is exploding higher, not because of takeover talk but because of an incredible surge in business both here and in Europe, the latter being particularly strong and aided by a weak dollar. Boy, it's been a long time since we heard that.

Most important of all, there's been nothing new from our president and the appointment of former FBI director Mueller has indeed tamped the drumbeat of leaks that have so plagued the administration.

Put it altogether and you can see we had the classic rally after a vicious selloff with the soft goods recession stocks bottoming first in the last hour of day one, the fast growers levitating all day through day two and now pretty much everything in rally mode.

So the question is no longer, is the rally for real. It is.

The question is, have we shaken out enough weak hands in many sectors to hang on to stock instead of using this moment of strength to trim back.

Normally, I would say, wow, we are all the way back and you know what, I am not taking any chances. Now that we have a bullish tape I will use it to exit.

But for my charitable trust I was only able to buy a little stock and put a little cash to work in the downturn. As far as I am concerned that means it may be too risky to be a buyer or a seller here.

Day three, you stand pat after a successful test yesterday and you say to yourself that some of the most vociferous anti-Trump bearish investors are starting to factor in a Pence presidency, and they are getting nervous that they missed the bottom to cover some of their bountiful shorts.

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