If you want to create the ideal stock in this environment, you want it to be an artificial intelligence-based cloud company that can help further e-commerce, particularly in payments, while delivering a product the last mile to a house that's being rebuilt in Texas or Florida.
It is eerie how those characteristics keep coming up in all the great charts I look at this weekend.
Let's go over some of them. Red Hat (RHT) has burst onto the scene as one of the most exciting companies when it comes to every entity, from retail and government to universities, moving on to the cloud, from the private cloud to the public cloud and any switch from one web services company to another. It's become the roadmap and the handyman, the company that can make everything seamless. In many ways, it remains the unsung winner in the cloud wars.
Autodesk (ADSK) is the Adobe (ADBE) for the designer, integral to the creation of any product, and its move to the cloud is ongoing and positive. Its biggest problem has been pirated software, and it has cracked down on that, causing earnings per share upside. You can't see any top to this one any time soon.
When you look at Nvidia (NVDA) , you think: is there anything this company's not into? Its chips are used for anything voice, which we know is the rage. The chips work at the highest level of gaming. Take Two (TTWO) , which in many ways is the best designer of games, has actually kept back games to take advantage of what Jensen Huang is developing. The Nintendo Switch could sell 20 million units this year, and it is based on Nvidia chips.
Meanwhile, it is rolling out autonomous driving chips that can make trillions of calculations instantly, which makes them best in class. Its cards are used for crypto-currency mining, and its new devices will storm the data center, because there's more computing power at the same time there's less heat. That's the whole shooting match, which is why the stock keeps blowing through levels, even as we know its hundred billion-plus market capitalization seems absurd.
I worry about the stock of Nvdia, because it tracks the price of bitcoin way too closely, and bitcoin is in the stratosphere, where the air is too thin. There could be another shake-out coming.
Then there's the Amazon complex, which includes UPS (UPS) and Fedex (FDX) . The troika seems unstoppable here, and Amazon seems ready to go off over $1000. Don't forget Alibaba (BABA) , which has been resting comfortably and seems it could lift big. The data center companies, so integral to e-commerce, are all poised, but I love CoreSite (COR) best, with that 3% yield.
I struggle daily with how I let PayPal (PYPL) and Visa (V) go for the trust, Action Alerts PLUS. Just thought I was being a pig, but that was so stupid, and all three seem to have no resistance. Is there anyone who doesn't want to see a pullback in any of these? All three have fintech going for them, but PayPal has the Venmo upside. Global Payments (GPN) is trying to crack into that elite group and seems like it will succeed.
I don't have to tell you how hot the semis are. You know that the Micron (MU) breakout led the way, but be careful of Lam Research's (LRCX) report on Oct. 17, as that semi-equipment behemoth led the group down on an excellent quarter. Applied Materials (AMAT) has been so impressive post that New York analyst day, that on a shelling, that one could come up aces. Texas Instruments (TXI) just keeps getting it right. As I said last week on Mad Money, it's the sleep-at-night semi.
Away from this internet of things complex, the defense stocks just keep going higher, and the outside choices, Leidos (LDOS) and Harris (HRS) , just want to join the Lockheed (LMT) , Northrop (NOC) , General Dynamics (GD) , Raytheon (RTN) foursome.
A couple of oddities that have to be flagged. As good as the biotechs act, it's Thermo Fisher (TMO) that's getting it done. What a fabulous company, and it is distancing itself from the others, save Roper Technologies (ROP) .
Stanley Black & Decker (SWK) just keeps going higher, and we have to believe that's Houston/Florida along with Home Depot (HD) which has shaken off the Amazon (AMZN) demons. Only Walmart (WMT) , away from that, can be trusted in retail. I keep thinking TJX Companies (TJX) will join that elite group, because of all of the department store closings and I keep on thinking wrong.
It's industrial time. Emerson (EMR) , Eaton (ETN) , Parker-Hannifin (PH) , Illinois Tool Works (ITW) , Caterpillar (CAT) , Cummins (CMI) , and anything that looks like them, can work. It's incredible what scarcity value there is in the industrial sector. You find one, you have to hold on for dear life.
Finally, some one-offs. HP Inc. (HPQ) coming off that analyst meeting where 3D claims could turn into 3D earnings in 2018. Wyndham (WYN) seems to be getting the respect for the split that Marriott and Marriott Vacation Worldwide have given you. Intuit (INTU) just keeps breaking free. International Flavors and Fragrances (IFF) is getting it done. As is Estée Lauder (EL) . No common ground, just companies that have caught the fancy of many.
Now, I would be remiss if I didn't point out whole sectors that seem strong: transports, biotechs, auto and auto-related, save Ford F.
But it's the e-chain that this market's smitten with, and I think that's going to be the fourth quarter's sweet spot.
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Join Jim Cramer, CNBC's Jon Najarian and Other Experts Oct. 28 in New York
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