Time for Stocks to Bounce Back (Oct 20th Week)
Cramer points out why stocks may be finally at a bottom. He has some credible reasons. Let's hope next week kicks ass for stocks.
(Jim Cramer | theStreet.com) Boxes checked galore! What can I say, we got movement on every single issue where I have needed to find an investable bottom, and that's exactly what we might have found here. The checklist is fulfilled and actual investments made. I can't go back and second-guess it when we have so many boxes checked. Look at this list.
First, I said we would not get a bottom until we have Ebola under control. We won't have a true end to the Ebola crisis until we have a vaccine that works, but we did take steps to control it and bolster confidence about not contracting a disease that so far has killed one person in a country of 317 million. What's changed? Several things. First, President Obama, who had been curiously disengaged over the issue, has started to focus on it with the gravity warranted. His fireside chat last night and his appointment of one of the most connected and tough administrators I know, Ron Klain, to a position of Ebola Czar is incredibly welcome. We have lost a great deal of confidence in Thomas Frieden, the head of the U.S. Centers for Disease Control and Prevention, who created a false sense of security and a degree of complacency that has been directly responsible for the spread of the virus beyond one stricken patient. Now Frieden will be free to spend more time on the flu, which I think he may be able to handle. Klain will be able to mobilize all forces, whether it be health care officials, doctors, the military, politicians and drug companies to get this thing under control. It's a real good move and it's most welcome. Plus, let's not forget we are now past the incubation period for those who came in casual contact with the man who died from Ebola in Dallas, and we haven't yet had anyone come down with the disease. I know, fingers crossed, but it has been 23 days since Thomas Duncan became contagious and that means people who met him might be able to breathe easier, and we can feel more confident that casual contact does not give you this scourge.
Second, nearly every single group was hit this week. They've all fallen -- from the high-yielders to safety stocks to utilities, and from real estate investment trusts to tech and oil and finance. That's what we've been waiting for, and this weeklong torture gave it to us.
Third, with the crushing of Netflix (NFLX) , perhaps the most speculative stock in the market, we checked off the box of keeping speculation in check. Lots of money has been lost speculating here, and that's a good sign, not a bad one. We needed it reined in to get a bottom, and I believe the pasting of Netflix among so many others has done the trick.
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