Mad Money w/ Jim Cramer 2/2/26

Hey, I'm Kramer. Welcome to Mad Money. Welcome to Kramerica. Other people make friends. I'm just trying to make a little bit of money here. My job is not just to entertain, but to put it in context. So call me at 1-800-743-CBC. Tweet me at Jim Kramer. Don't be fooled. Not everything is bad. Stop making moves because of false tells, things that mean nothing, or things that look negative, but are actually positive when you do a little digging and some thinking.

If you let yourself get shaken out, you're liable to miss terrific moves like today. With the Dow jumped 515 points, this would be gained four.54, and NASDAQ climbed 0.56. Worse, you're passing up chances to buy great stocks at lower prices. If you just want to forget about the averages, think about individual stocks.

Why don't we start with last night? Last night, you know what? It was a textbook case of the Sunday scaries. I keep seeing this happen. You know I watch the SB 500 Futures like a hawk. Not just because I wrote my Sunday think piece for CNBC Investing Club members, but because they're so often wrong. And I want to warn people that there could be some terrific buying opportunities obscured by these futures.

We had a strange timeline on Sunday night. The futures opened about flat, but then they collapsed. Why? The only thing I could find was a nosedive in oil and natural gas, as well as gold, silver, and crypto. Every article, every snippet of news last night told us that these that our stocks our stocks would go down because they tracked the weakness in those commodities. It was presented as an ironclad tile. Problem is it's completely bogus linkage. It's just plain wrong.

Why don't we put things through some common sense? What kind of views like a Uh I don't know, like a filter, okay? Well then going up because of tensions with the ramp. These tensions diminished as there've been some communication between us and the Iranian government this weekend. A media is now set between White House envoy Steve Whitkoff and his counterpart from Iran. It seems like there could be some sort of dialogue that can take war off the table.

It's good news for 340 million Americans that oil fell four percent. Good news, not bad news. Natural gas falling more than twenty-five percent today, its biggest one-day decline over thirty years, a function of more orderly distribution of gas in this country. After all this buildup of pipe, America still has a very flawed distribution and storage system, struggles anytime you get hit with a nationwide cold snap.

But now we've gotten our act together, at least this weekend. This decline is fantastic for every home that's heated by nat gas. When oil and gas went up, we thought they'd hurt the economy by putting pressure on the consumer. Higher energy prices were considered bad. So when they both reverse, how the heck is that bad too? Of course it's not. Positive. But the journalists and the traders, they quote, either don't understand that or they wanted the market lower. Both are irresponsible.

How about gold and silver? Okay, these have been the subject of intense speculation, mostly by Chinese investors, by the way. These speculators were apparently undercapitalized using too much leverage, lots of individuals. I'm not that focused on gold as the rising price only hurts new jewelry. The existing jewelry actually goes up in value, and there's a lot more of that.

Silver's not as precious, but as more industrial uses, solar panels, electric vehicles, batteries. The Rally in Silver jacks up the price for all sorts of electronics and electronic vehicles. Expensive soldier silver is a clear negative for the economy. On the other hand, a rapid decline is terrific for the economy. So why would you sell stocks on a rapid decline?

How about crypto of all kinds? And there are many different varieties. If you go to CoinDesk as I do, when you see crypto up, that means there's less money going into its competitors, the stock market. Again, thinly capitalized players have sent it down. The only real fallout might be severe strain in a company called Strategy, which has bought a lot of Bitcoin with borrowed money.

Strategy reports this week. I don't know how exposed it is. But again, I'd rather have the money come into the stock market. Robert and Coinbase, which do a lot of crypto businesses, have seen their stocks get hurt, but those are actually reliever to volume, not the price directly. So it's actually good for them unless there are so many clients on margin to get wiped out. To recap, the reversals we got this weekend were in every single case positive. Not negative.

The SB futures should have been higher, not lower. They were just clearly wrong. It's okay. People make mistakes, but I question the verbiage around it. This morning we had disarray because of those same futures. They pulled down everything.

If you knew that these negatives were actually positive, you would have been able to buy a host of stocks on the cheap, like the semis, the retailers, the banks, the data center plays, the transports. Retail, big. Now let's consider what was reported incorrectly this morning. Oracle's trying to raise$45 to$50 billion to continue its aggressive data center build-up. Last night the company announced the terms. Half will be bonds, half will be equity or equity equivalent.

I immediately heard lots of chatter that such a finance would be impossible to do. But I did some homework, I knew the syndicate desk was putting the deal together, and I found out that the deal was already wildly oversubscribed. Oracle can raise the money in a heartbeat. So what happens? Well, after opening down stocks like Sand Disk, Microm, Western Digital Seagate, all of which make memory chips or disk drives for the data center, they uh uh they took off.

If you knew that things were good, not bad, you might have bought the stocks and sold them. But the information was not spread out effectively, and the journalists who followed the stuff were negative about the Oracle deal.

So it was very hard for people to make money and very easy for people to be lose to lose money and be shaken out. What else? Okay. Last Friday we got a set of numbers from a company called Colgate. You're probably familiar with. They were much better than expected. Delayed reaction, we saw some positive action. In stocks of other companies that might rally or bet or have better numbers too that are in the same industry. And by the way, that include the drug cohort, not the food.

This was a highly unexpected move unless you read the Colgate call. You had to read it though. The group had an insanely strong move right from the get-go. Now I should not all the foods are bad. PepsiCo reports tomorrow. It's gone from 144 to 155 in seven sessions. I don't know if that's still a buy. We'll see tomorrow. But I just want to point out that Colgate ignited a rally. But if you didn't know that Corgate was good, you wouldn't have known about the rally.

Then at 10 a.m. we got this ISM Manufacturing PMI report, and the results were the strongest since 2022. This is really about economic activity. It was fantastic for the industrial stock. Again, uh the data center builders, but also f like I'll give you two examples, FedEx, okay, up ten. Caterpillar, six fifty-seven to six ninety. They represent groups, transports, industrials that rally like mad when the PMI is strong.

You get a strong number like that, and institutions always reach for retailers too. So Walmart and Target, both of which have new CEOs, just started, both sort 4%. Costco rallies 3%. Oh, and then we hear about that Oracle deal, the one we're raising money for data centers, and the money's not a problem. I drove lots of money again into the memory and storage stock. So let me give you an example. You could have bought Sand disk at five hundred and eighty six dollars this very morning, okay?

Do you know what went out at$665? You caught about Western Digital$243. It closes at$270. You just had to know the term allocation, meaning that you can't get all you want. These companies are trying to allocate product to their customers because there's just not enough to go around. That's a good hand. Now NVIDIA got clovered today because of what I think are ill-advised stories about problems between it and open AI.

I have NVIDIA Jensen Wong on the show tomorrow. You know what I'm gonna do? I'm gonna try to clear this stuff up. It really does need clearing up. And not just because I want the stock higher, that doesn't mean anything to me at all. I don't care. Now I'm not a Pollyanna about this stuff. I'm not a cheerleader. If if NVIDIA is bad, I've got to say it's bad. Okay? I will.

I don't think it is, but I will. I'm simply saying that if you take the critics in the future seriously, then you lost a lot of money. You need and this happens so predictably and so often. I feel like I need to protect you. You know, when you see the future's way down, or when you read that silver's going down, it's bad. With silver going up, it's bad. That's nonsense. And there's so much nonsense.

The bottom line, if you believe the constant barrage of negativity, you'll miss some incredible buying opportunities in great stocks that rarely come in. Don't say you didn't have a chance. If you're a prisoner of pessimism, you must break free if you're trying to make real money in this stock market.

Let's go to Robert, New York. Jim, I just wanna wish you a birthday that's coming up for you next week on in February. Happy birthday to you, baby. Thank you very much, Robert. You're the first one. You're the earliest. Thank you very much. Uh she'll be good this year. She'll be good. Thank you. She's always good. Thanks.

All right, so Jim, this next company is up ninety eight percent this patch year. Now this company really stood out last year, Jim, amongst its competitors because they have really progressed on fixing operational issues from store standards to supply chain execution and labor efficiency. Now if everybody

Watching your show tonight goes back to the videotape. Last year when you recommended this stock at seventy eight dollars, you can b we can all back this up, baby. Well, the stock is now a hundred and forty three dollars you've made me. Todd Vassos is the CEO that they put back in and he's a sharp guy like you. Is he it? I know who you're talking about. Okay, I went to Dollar General that weekend. The reason I recommend the stock

I had a fabulous experience at my Dollar General in six eleven. It was much better than before. I know they were thinking, what are you case in the joint? What's he case in the joint? Because if I want to do a good job for you, I take the mat, I take the stuff that Wall Street does, I take a look at the conference calls, and then I go into my own aisles and see what's going on, and Dollar General was terrific, and you know what?

Remains terrific. Okay, listen to me. If you believe in the constant barrage of negativity, you are not going to make money. in January, you gotta do them both. I'm analyzing both the worst and the best. And as we look ahead to the rest of the state. continue to broaden out in a non-spected way, I'm going off the charts department. So I want you to stay with. Mrs. Second of May. Tweet Craig. Mad mention. Send Jim an email to Matt. dot com or at 1-800-743-1. C and B C

The first month of 2026 is officially in the books. So before we move on to another very busy week of earnings, I want to go over the state of the market. Last month we saw this big change in leadership with a small cap-focused Russell 2000 rallying astounding 5.3%. Neal economy oriented Dow Jones Industrial Average up 1.7%. Translating both the SB500 and the Tech Hebby NASDAQ with the latter up just 1.2%.

When you look at individual sectors, energy, materials, and consumer staples led the way. Very different from last year, huh? With our old leaders like tech, the financials lagging weight. To really get a feel for this market though, I want to go over the ten best and then worst performers, the SP for January. I really like doing this stuff. It really kind of concentrates the mind. Why don't we start with the winners where four of the top ten performers were memory and data storage play?

This memory storage sector is the hottest bull market around, and it comes on top of some amazing runs in twenty twenty five. Sanchez came in first place up one hundred and forty three percent in January on top of being last year's best performer. Western Digital, the company that spun off Sandisk about a year ago, was in fifth place of forty-five percent micron.

It's run by Sanjay Morocha, one of the founders of Sand's strong bloodlines there. The secretariat of memory, wow, a big. Seagate was in third of forty eight percent, and Micron was in fourth of forty five percent. Now, all of these memory and data storage plays more than tripled last year thanks to surging demand from the data center, which is driven by artificial intelligence.

Sanders is flying because it reported a blowout quarter last Thursday. They earned six dollars and twenty cents per share. You know what Wall Street was only looking for?$3.62? If you Gemini upside surprise, it should send you to Sanders. They're talking about earning twelve to fourteen dollars per share for the full twenty twenty-six fiscal year when the NS were really looking for five dollars and eleven cents.

That is a staggering upside surprise. That's why the stock keeps going higher. No one knows exactly where it should be other than a lot higher than where it is. That's how you actually think on the training desk. Initially Sandus rallied more than twenty five percent response to the great quarter. By the end of the session on Friday it was up just under seven percent, although it plans through up today. So maybe there's more here.

Western Digital also reported Thursday night delivering a solid beat with excellent guidance, and the stock actually finished down more than 10% on Friday. Stock erased some of those losses today as the data storage players came roaring back.

But you have to keep in mind sooner or later someone's going to add more production capacity, if not the uh American companies, then the Korean competitors. And once more capacity comes online, it might be hard to maintain these sky-high prices, but I don't see any supply within this real.

Speaking of cap cap of capacity, I want to jump to the sixth best performer in the SB, January, because it's Lamb Research, LRCX. Now this is a semiconductor capital equipment maker. This is who you call when you want to boost your chip production. Lamb reported great results on Thursday night. Yet it suffered the same fate as Western Digital, brief gains after the uh open on Friday, leading to a nearly 6% decline.

I'm a big believer in the semiconductor capital equipment makers. They do make me skeptical about the continued outperformance of the storage place. Because a as this new machinery comes online, again, it will marriage those chip shortages. But that's not going to happen anytime soon. I'm thinking it may be a late twenty-seven uh early twenty twenty-eight thing. Put a quarter of the position on if you want to buy land research and then leg in. I think it's really worth doing.

Next, let's go back to the second best performer in the SP for January, and that's Moderna. That was up nearly 50%, and this was at a wild ride. After practically pretty money during the pandemic, thanks to its COVID vaccine, Moderna plunged 95% from its peak. In 2021 to its lows last November, really gaffed a lot of people. But over the past couple months, the stock's found new life, nearly doubling from its lows.

Now the move started after a very positive investor day event in November, where Moderna said it would return to revenue growth in 2026 for the first time since 2021. Big deal. I also think that Wall Street has seen what Health and Human Services Secretary RFK Jr. wants to do to the vaccine industry, and maybe it's just not as frightening as people thought. And Moderna might finally deliver those personalized cancer vaccines that they told me about a very long time ago.

That said Moderna remains deeply unprofitable. It's likely to remain that way for years to come. Even though the stocks on the men, there are many farm and biotech names that I like better. I've been looking at Regeneron over the weekend. That's really made a nice comeback. That's a good interview we had with them out in California. Next to the seventh best performer last month was Lockheed Martin up thirty-one percent defense play.

What a difference a year makes. Twelve months ago Lockheed was in free fall, with Wall Street terrified that the Trump administration would slash defense benefits. A year later, Elon Musk's doge has been disbanded and the pressure's calling for a fifty percent increase in the defense budget, which is why Lockheed's on fire.

Last Thursday, the company backed its gains with a tur backed up its game with an excellent quarter. I really liked their conference call. It featured a top and bottom line beat and more importantly a terrific full year forecast. I wouldn't be surprised if it's got more upside already. Jim Taquelett is an awesome CEO. Yeah, I really love the quarter. It was you know spent some time on it, just went page by page. Really good.

At number eight we have bungi. That's up nearly that's B U N G E that's how you pronounce it though. Up nearly twenty-eight percent this month. It's an important agricultural middleman. I don't see a specific catalyst for the bungee move, aside for some positive analyst commentary. Based on improving outlook for the broader industry. Now, if you believe in an ag recovery and the cars for 2026, maybe Bungie still looks pretty cheaper, trading just 13 times this year's earnings.

But the company reports on Wednesday, so you maybe you want to see what they have to say. I this one I'm not as close to as I used to be. At number nine on the list is uh January's top performance SOB. Yeah, that's the old slumber. It gained twenty six percent last month. Now the oil service tightened, good proxy for the broader energy sector, typically. I've been skeptical on all things oil because Trump's drill baby drill policy generally bad news for energy prices.

Uh that's what we saw in 2016. Uh it was the right call last year. But in 2026, we've already seen partial regime change in Venezuela and the threat of military action Iran, so oil prices have firmed up. Meanwhile, natural gas prices soared in response to the cold snap across most of the country, but they gave up a lot today.

I'm honestly not sure how much to trust this energy rally. Today oil prices fell after some calming Iran talk over the weekend, and net gas prices are quickly falling as well. But I will say this, if any energy stock t has staying power, it could be SOB.

Drill baby drill may be bad for the oil producers, but it's great for the oil service industry, right? Because that means you're gonna find more uh properties to to drill. And I've guessed L C S L B could be in Venezuela, big for all we know. Uh very positive outlook when they're ported. Finally, rounding out the top ten from January is Intel.

Which finished last month up nearly twenty-six percent, despite selling off in the wake of its fourth quarter report on January twenty second. Overall intel's more than doubled from where it was trading when the U.S. government invested almost nine billion for a ten percent stake in the company last August. Frankly, I didn't think Intel's latest quarter was all that negative. They issued weak guidance for the first quarter simply because their supply constraints.

There's no problem with demand at all. But given how much the stock had run up into the quarter, I can understand why it got hammered on anything less than perfection. I'm a big believer in the new CEO, Lip Boutan, Though I not that new anymore though. And I think the Intel's got more upside. Even as many wrote it off after that last quarter, it's caught us way back to nearly where it was trading before it reported. I think that the negativity was way overdone here. So here's the bottom line.

When you look at the 10 best performers of January, there's a lot going on. But most of the strength is semiconductor related, with a smattering of beaten-down stocks from other industries that are making some much-deserved comebacks. I want you to stick around after the break. I'm gonna go over SP's 10 worst performers. So a lot to learn. Very illuminating. Mayabani is back. January was free.

Before the break, I went over January's 10 best performing stocks, C SP 500, mostly memory and storage place, I'm Dr. Capital Equipment Maker, Intel, and then some individual representatives of a few other disparate groups, uh Defense, Ag, Energy. But what were the worst performers in the SP 500? In the first month of the year. Okay, most of these are enterprise software companies where investors are worried about AI displacement. These were used to be the hottest stocks in the world.

Now the worst performer, AppLovin, was down nearly 30%. The former market darling got it to start helping mobile game developers expand their reach sell advertisements, though lately it's expanded into other areas like e-commerce advertising. Still the core business is about ads for mobile games. This stock had a real bad month, but it got t uh just hideous last Friday when it plunged 70% after Google announced a new AI platform called Project Genius.

This thing lets you build immersive digital worlds with simple plain language prompts. You can literally use it to make your own video games. Say nothing of making ads for already existing mobile games. Anything can add into the gaming co-hort got obliterated. Now I think the solve was pretty I thought it was exaggerated.

But at the end of the day, Wall Street's terrified that AI will eat App Loving alive. So people simply aren't willing to pay as much for the company's earnings. A month ago, the stock was trading at more than 42 times forward earnings. Now it's trading at 32 times forward earnings. And the pain may not actually may not be over. I never want to compete against Google and this stuff. They are monstrous competitors. I don't want to own the stock.

Looking at last month's biggest losers, number two, number four, number seven, number nine, and number ten, they are all software companies. They all follow the same business model. They're all weighed down by the same thing as Appleove and AI worries that are shrinking priced earnings multiple.

The second worst performance of the SP 500 last month was Intuit, the maker of TurboTax and QuickBooks, as well as a couple of other personal finance platforms and and and marketing tools for small businesses. This thing was down nearly 25% in January. This is a very good company.

ServiceNow was the fourth worst performer with an almost 24% pullback. Salesforce was the seventh worst, down almost 20%. GoDaddy, which offers tools to register and construct websites, many people use them, was ninth worst, down roughly 19%. Tyler Tech. Which makes software for public sector customers surrounded out the bottom ten with stocks down nearly nineteen percent. Now I think ServiceNow really stands out as a poster chop for what's happening to the group.

We just had Chairman CO Bill McDermott on the show last Wednesday night after service now reported very good quarter. That was a beat on every key line, mostly better than expected guidance for the current quarter and the full year. Now honestly, I did think that the numbers would allow the stock to rebound. I thought it would at least get some lift, but I was wrong. Instead it plunged 10%. Well the numbers. Nearly 10%. It was kind of amazing, frankly. Why did it happen?

Because the numbers don't matter when Wall Street doesn't believe your industry has much of a future. All these beaten down software companies are profitable. All of them have gotten cheaper on the way down, doesn't seem to matter. And towards forward per price earnings multiple has gone from just over thirty times forward earnings at the end of twenty twenty four to just under twenty times earnings now.

Service now score from 64 times earnings and 28 to 28 times earnings in the same time. Salesforce, get this, 30 times down to 16 times. GoDaddy, 30 times down to 14 times. Tyler, 54 down to 29. That's a textbook example of multiple compression. It's extraordinary. Now, if you don't understand anything I just said about P E's and multiple expression. I spend so much time talking about it here.

Because it is the most important thing about your stocks. Knowing the multiple, knowing while compressor expands, how to make money in any market, this is what you need to know if you're going to own stocks of high price earnings, multiple copies.

At this point you could argue that there's some overshooting on the downside. If you believe in this industry, I'd recommend going with ServiceNow or Salesforce. We own the ladder for the Travel Trust. We've owned it for years and years. But honestly, you could have made the same argument a month ago and you would have taken huge losses in January. So I don't blame anyone who wants to avoid the entire enterprise software career. It is an incredibly bad market. Incredibly bad.

I mean you compare that say like to the transports, fresh high, fresh eye, fresh eye. These are fresh low, fresh, low, fresh, low.

The third worst performed in the SP last month was Humana, the managed care company with a lot of exposure to Medicare Advantage. These are health care plans for senior citizens that are subsidized by the federal government. Last Monday night, the Centers for Medicare and Medicaid Services announced that they'd pretty much keep payments to private insurers next year. Uh uh uh almost flat. Small street was looking for five percent. Now get this.

This was from a ma'am at Oz. He's in this business. I mean he understands this business and he was the regulator. And he's had it. Okay, he's had it. Now it's caused an instant sell-off for any company with Medicare Advantage Exposure. You may have got hit the hardest. Now many companies offering these plans have been struggling to price them appropriately, suffering big losses because the benefits were too generous.

I have your man a medical care medical advantage and I gotta tell it is terrific, but the question was And if the federal subsidies start lagging b uh behind the rate of inflation, that's only going to get worse. I don't know, my view it used to be the Democrats who went after health insurance, but now it's the Republicans cracking down. I think it's brutal. I think it really is spells like I don't say the end of anything because these are smart companies, but you can't touch them.

Next, the fifth worst performer last month was Constellation Energy. It's the independent power producer with a ton of nuclear exposure. Stock lost more than twenty percent last month. Trump administration announced a plan to make energy more affordable in the mid Atlantic region by calling for fifteen billion dollars of investments in new power plants, as well as caps on how much exit and existing plants can charge for electricity. Not great.

Now, I do think Constellation is worth buying into weakness because new power plants take it take ages to build, and price gouging has never been a part of their strategy. At twenty four times four earnings, you know what? I like this one. Sixth worst performer was the Trade Desk. An online advertising play, oh man, we used to love this stock. Saw its stock get obliterated last week after the company announced that they fired their new CFO after just five months on the job.

Not good. The trade desk is already struggling to find its place in a world where AI is ascendant. Throwing the CFO uncertainty, and I think it's just not worth the risk. Finally, the eighth worst performer last month was Las Vegas Sands. That's the casino company that's now exclusively a play on Macau in Singapore. Stock sank ninety percent last month in large part because they did report a disappointing quarter last Wednesday. With weak mortar

Cow, thanks to elevated promotional spending. It looks like wealthy Chinese consumers are still hesitant to spend heavily. Perhaps because the real estate market's doing so badly there. Uh y y you have to try to

Let's i there's nothing particular that makes me understand why that things were really that bad there. As I said on Friday, I'm skeptical of the gambling industry right now. Even if I were willing to take a chance on a bounce, I'd rather do it with a company that gets most of its business from the United States. I do like wind, for instance.

What can we learn from last month's biggest losers? The bottom line is there are a lot of names where we're seeing shrinking price journeys multiples, and that's thanks to artificial intelligence worry. Especially in software, as well as a couple firms that have been hurt by the government, UMAN or Constellation Energy. And then some are just doing badly like the Trade Desk, Las Vegas, Sands. It's a motley crew of badness. Only way I can put it. Let's go to Dave in Florida. Dave!

Hey there Mr Kramer. Boya, how you doing? I am doing well Dave. How are you doing? Not too bad. My uh call today is about Marvell Technologies. Uhhuh. You know, about three months ago it was about a hundred dollars a share and it dropped and it's been hanging at seventy and eighty dollars. What kind of company is Marvella? Are they a good company in investing? They are they are an excellent company, but they are a derivative company. They make s stuff that actually competes.

Uh the main part of the business that that that is a little like NVIDIA, frankly, and they're also a partner with NVIDIA. Uh they make special chips. Uh they make some of the best special chips in the world, as does Broadcom, by the way. All these are on the sh the are on the negative side. The long side are things like Western Digital Sand Disc, uh because these are not in shortage, okay? They just have enough chips.

They're not like that. So what people are doing is buying the shortage stocks and selling the ones NVIDIA, Broadcom, and Marvell that don't have a shortage. It's a really stupid way uh to invest, but that's what the market's doing right now. And I'm sorry. I wish I could reverse it myself, but I can't, because Matt Murphy is a fabulous CEO at Marvell. Let's go to Richmond, Florida, please. Rich.

Hey Jim, uh big fan, investing club member. Oh thanks. First time long time you've made me a better investor because of you. Wanted to ask you uh I've held this stock since twenty eighteen. I'm uh seven hundred and twenty five percent. I take it my principal out. Like you've taught me, playing with the house is money and I think it can continue to grow, but it's taken a beating lately. Tell me what are your thoughts with Axon?

You know, I saw the body camera story in uh Minnesota and I first thing I said was like does axe and I have that con that contract? And I don't know the answer. I'm gonna certainly find out about it. I know that the stock was up because of it and then reversed. Uh I want you to trim it again. All right. I want you to trim it again because it should have been up today and it wasn't. Uh the fact that it erased that game very quickly tells me it's still too

Heavier stock, take some more off, and then you really can let the rest run. Uh, you called me on it, and I just think I should tell you that. I don't want to say, hey, don't worry about it. I can't. It's not acting well. Now, some of the worst performers this year have seen their price earnings multiple shrink thanks to worries about artificial intelligence.

Badly. Now much more made money, including on board off to the trucks with historical look at the relationship between Bitcoin and the stock market and how it can impact your investing strategy. Then it finally time it's finally time to write the obituary of one of the biggest stories of the past few years. With a heavy heart, I'll tell you what we're saying goodbye to

to and why the time is right. Of course all your calls rapid fire in tonight's edition of the lightning round. Hope you like that rundown of the good and the bad.

Now that we've made it through the first month of the year, a good chunk of fourth quarter early season, what's the prognosis for this market? Start answering that question tonight. We're going off the charts with the help of Jessica Inskin, one of our favorites. The first woman on the active trader, Jessica Fidelity, who's now director of in of investor research at stockbrokers.com, as well as co-host and founder of the Market Maker Podcast.

Even if you don't appreciate puns, last year she did a great job of warning us what to watch out for while she's taking out 2026. Let's start with the weekly chart of the SP 500. As far as Inskip is concerned, the SP remains in a secular bull market. Okay, that's real important. It means it's not going to stop anytime soon. Even after a strong performance last year, she thinks this chart is more momentum.

This picture shows a textbook bullish trading cycle. Remember, Inskip does something unique. She likes to look at the thirteen weeks. twenty-six week and forty week moving averages because those represent the action over one, two, and three quarters respectively. Given that the quarter is the most fundamental unit of time in the business world, those are what you want to watch.

In terms of the SP 500, the 13 week, 26 week, and 40-week moving averages are all sloping upward. Ooh, do we ever like that? Providing nice forces support underneath the index, that's what makes for a bullish cycle. Now when the SBA high of six nine two oh

Back on October 29th, that level became a powerful ceiling of resistance, keeping it down. Keep it that put the lid on the market, okay? But we've now broken out above that level, and the old ceiling of resistance has now become yet another firm floor of support. See that Resistance and then f then support right now.

The most basic definition of an uptrend is a series of higher highs. 6920 marked the prior trend high from before the fall sell-off. So for InSkip, the fact that we're now holding above that level is very encouraging. But if we can't hold above that level, she would expect to pull back to the 13 week moving average, which is currently 6845. Okay, it's right around in here. Um Inskip says that kind of action is helpful.

She'd be willing to be a buyer on weakness. In fact, she wouldn't really start worrying about any sell off in the SB until it breaks down below the October 10th low of 6550. There it is, down more than 400 points from where we are right now.

That would represent a lower low, and once you start making lower lows, the whole uptrend gets called into question. But we're a long way from that floor at 6550. I like the fact that we're well above it. I'm not really that focused on this. Even when the market opened this morning and everyone was panicking. Basically, as long as the SB holds out above the October 29th high of 6920, which is dozens of points below current levels, NSC is feeling very sanguine about the market.

We have more than four hundred points of downside cushion before things get ugly. Six by five oh is the real line in the sand, and we're nowhere close to this line in the sand.

How about the weekly chart of the SP 500 equal weight? Okay, what is equal weight? That means we kind of get rid of the mag 7, so to speak. It's uh it gives you a better sense of the non-megacap stocks in the index. The regular SP 500 weighs all all stocks by market capitalization.

In the equal weight version, every stock counts the same. So you know you you could say something like, I don't know, Mattel's the size of uh Microsoft, that kind of thing, you know what I mean? Uh tells you a lot more about the market express. And right now when you look at the SB equal weight, it's clear that the market's been chugging Listerine. Why? Because the breath is so good. Where's my button for a rim shot?

Inskid points out that the equal weight index has broken out above key resistance levels, even if it pulled back a little bit from its highs. a week and a half ago. Right now the thirteen week, you remember these, the twenty sixth week, the forty week, are sloping upward again. That's what we want. Okay? You always want to look for that in a chart. Um and that's underneath the action that's bullish trading cycle.

This is a much better chart than the other. More important, the equal weight made a high of seven, eight, nine, six back on December twelfth. That was a key ceiling of resistance, but we broke right through that ceiling last month, and it's now become a new floor of support. Again, as long as the SB equal weight holds above that level and it's currently well above that level, this could she likes the action.

The fact that the SB equal weight is levitating tells you that this bull market's broadened out very nicely, which is why that floored 7896 needs to be held. If the SB Equal Way does give up the ghost, then the market becomes hostage to the megacaps, and that's not the best place to be, given that their performance has been a definitive mixed bag. Stay tuned for more on that later. Finally, let's talk about Bitcoin!

Uh uh it's had a terrific run today. But it's still down years since we last checked it in with Inskip two months ago. Back then she warned us that Bitcoin is the Achilles heel, the speculative side of the stock market, because people who own the most high-risk stocks also tend to own Bitcoin. It's like they're, you know, they're holy grail.

When crypto's doing badly, the entire speculative complex loses its footing, and crypto's been doing real bad in the new year. Take a look at the weekly chart of Bitcoin. As ISCOM sees it, this is a bearish trading cycle. The 13 week, the 26 week, and the 40-week. They're all trending lower. Remember how I had the other ones going like this? Look at this. These are all like this, okay? Bad.

Uh and they're all above the price of Bitcoin, which means each one represents a silient resistance. We've already seen a breakdown below a key November twenty twenty four weekly low of eighty t eighty thousand two hundred eighty three. But fortunately, Bitcoin has been able to hold above its crucial floor of support down at 73,802. That was a well-established support zone formed from March through November of 2024. It's been propping up this cryptocurrency for nearly two years.

As long as Bitcoin holds above that key level, InSkip believes we won't see another total meltdown in the superspective stocks. If we break down below 73,000 internet boys, I look at that all weekend to see if we can get close to that, and then all bets are off, and the risk of a sharp disorderly sell-off in the most speculative stocks goes through the root

Remember when we spoke with Inskip two months ago, she warned that Bitcoin breaking down below 80,283 would crush the whole spectrum of cohort? Well that's exactly what happened. If the next floor just under seventy four thousand also breaks down, then she thinks the quantum computing place, the nuclear stock,

the ancillary data plays, the flying car names, all the highest risk stocks that will blow up by retail traders for most of the year, they're gonna get a violent beatdown. You know my view, the year of magical investing is over. I wouldn't touch those stocks.

Luckily Bitcoin's nearly 5,000 bucks above the key level now, but it was within a thousand points of it earlier this morning before people started propping it up. And given that this is crypto, it only takes a few bad days to rack up that kind of loss. Definitely something to keep an eye on. Although we know there are plenty of people trying to keep this from falling, it's almost like i you know what it is?

It it it's like the it's like Atlas with the world, you know, I mean like it it just g they gotta prop it up. It's everything to them. It's just a disaster if it falls below that level. Anyway, here's the bottom line. The charts is interpreted by Jess Gins is just the SB five hundred remains in bull mode.

And this bull market has broadened out, a healthy sign for the market. Unfortunately, I don't think we're gonna see a resurrection of the year of magical investing in 2026, though, because the Bitcoin chart is not encouraged. If you have a lot of speculative exposure, this is the time that you want to take action. Maybe tomorrow when You get a chance to sell some of the stuff. I need you to Coming up.

Fast fire lightning round. Next. It is time, it's time for the white rap good raffle. Are you ready, Ski Dack of the Light Round Consider and Let's Start with Steven in California, Steven. Hi, good afternoon Jim Jim. My first time caller as well as a club member since August. Excellent. Excellent. Thank you for sharing your wisdom and helping your viewers grow their knowledge in the market. Ah, thank you, buddy. Really appreciate that. Thank you.

The stock I'm going to ask you about today is the one and only speculative stock in my portfolio. I was hoping to get your thoughts on LEU. I the look. This is a good company. Centers is good. I like Constellation too. I'm going to say, you know what? It's okay. The stock's been under pressure for no particular reason. Let's go to Kathy in California. Kathy. Hey Jim, you're the absolute goat.

I have a problem. Sure. I have a problem though. I have a stock in my IRA account that's lost ninety six percent since I can't take the loss. Would I convert Teledoc to my Roth IRA in hopes it comes back in ten years? Or would that be changing money after it? Just get rid of it. I d I don't see any reason to own it. It's there's a lot of companies that are in that business. I'm sorry. I wish it were good. I but you know wish and don't cut it. Thank you. Let's go to Sunny in Massachusetts. Sonny.

I'm a club member. Okay, I have two wishes. One to have a signed book and two for Ben Soto and Regina to host the lightning round. Oh wow. Talk about inside baseball, Sonny. Tell me your thoughts on two. What? On Spear? Oh, I think Spear's great. We did, you know, Ben and I did it, we did a piece on Sphere and we felt really, really good about it. Ben we were right. And that was in part because we were just kind of blown away by Spear. It's really pretty amazing.

Thank you, and I'll pass on the words to those nice people because I don't know if they watch the show at all. They don't have a they don't catch it. They don't get a chance. They're like they're like everybody else in my life. They don't have a Let's go to Michelle in Ohio. Michelle. Hi Jim, Michelle from Beachwood, Ohio. I watched the shows in the morning and evening religiously. Oh, thank you. You covered all the notes.

Um you're great. You cover all the noteworthy retail stacks. However, you never mention Dillard's, which in my opinion is one of the best. Dillards well enough. I've been you know look I've been to Dillard's many times. I just don't think that much of it and I think so much of so many other retailers that I've been sticking with my knitting and going with the ones that I know best. And that, ladies and gentlemen, nice comments is the conclusion of the

Lightning Round! The Lightning Round is Coming up, they were the dark. be coming to an end? Kramer's revealing his startling conclusion.

A lot of people don't know this, but I used to write obituaries for a living. It's a sad job, as you can imagine. You want to be sure you get it right. And if you can, you need a picture. Always the picture. Well Here's the picture. It's of the Magnificent Seven, and I'm pronouncing it dead tonight. Why? Because the grouping no longer makes sense.

Just talk about a bunch of large cap stocks that don't have much to do with each other and are going very different directions, often some really lousy performance over the last year, and that's what I did today, looking them year over year. The Magnificent 7 was never about seven large cap stocks. It was always about companies with fantastic stock performance. Companies that made you a ton of money if you invested in them. That was the point.

These stocks don't do that anymore. In the aggregate, they kind of do nothing. There's nothing magnificent about them. There's nothing even special. My trust owns a bunch of these. I'm very conscious of this. Six of the seven. And we respect them. We know that they can take off. Some are just resting. I think NVIDIA's taking a breather, which is usually what you see before it makes a gigantic move. The darn stock now trades at just twenty-four times earlier.

I'd call it a coiled spring. Still up over fifty five percent from the past year, well in excess of the SP five hundred. I think you need to buy some here maybe tomorrow. I don't know if you don't know already. I'm that NVIDIA's still magnificent to me. It does the stock acts terribly, I know that. But the only other stock in the Mag 7 that's beating the market over the last twelve months and is fantastic is Alphabet. It's up over sixty-eight percent.

That makes sense. When Output reports on Wednesday, I think you can blow away the numbers. They become synonymous with two words, beat and then raise. Something good seems to happen every single minute at Alphabet. Just this evening, self-driving Car Division Waymo raised sixteen billion from Alphabet itself and other companies at$126 billion valuation. That's amazing. Not that long ago was considered to be an anchor to Leewood.

Still losing money, but it's the best in the industry in this country. How about the others? Can you really underperform the S P for a full year as these stocks have and still call yourself magnificent? Even Robert Vaughan and James Coburn have it all over the East and they didn't make it into the end of the movie. You know what I could argue that Eli Wallach's having a better year and he he uh he he he he was Calvaro, remember he was the bad guy? Uh not so good.

Apple could be making a move here. The pessimists are starting to tremble as the company gave terrific guidance when reported last week. Somehow though the stock got slagged by a bunch of bears who controlled the narrative. Looks like that's changing.

Tesla, now it's not a car company, although it's not the X the XAI merger that we're getting with SpaceX, whatever. But it's a cyber cabin robot company now. It has a chance to blast off, but it hasn't. You know what's more magnificent than Tesla? How about General Motors? My travel trust owns Amazon, Meta, and Microsoft. I I'm feeling like I did during my obituary writer days with these.

Amazon reports this week, I'm optimistic that maybe you could do a good number. I'm also wary that the market's already reached a verdict in this one. Amazon's being beaten by Walmart on web services uh on w when it comes to regular prime and web services being beaten by everybody, including Google. I don't know.

It doesn't get the respect it deserves, but other stocks do, and those are the ones I guess my trust should own. I don't know. I've been thinking about it all the time. Meta was a terrific quarter, really, but all I hear about is how it's just an advertising company with a pair of ray bands. They'd ever do anything to defend or promote their stock. I mean like nothing. They don't even seem to care. Uh well, what can I say? That's true. And then there's Microsoft.

Here's the least magnificent setup. When I go over that convoluted conference call that they just did, I can't tell whether they understood their stock would get obliterated. Maybe they thought it was going to go up. Did they know that they lost the AI race? Were they aware that they weren't making the playoffs? Did anyone comprehend what they were even saying, including them?

What the heck's with OpenAI? Are they partners? Are they friends? Are they frenemies? Are they enemies? Oh, and Copilot, did they really think that 15 million paid users was a lot of users? You know what, I actually felt sorry for Microsoft. Not too sorry though, because anyone who's forced to be a Microsoft user is so tired of Windows jamming unwanted updates down your throat.

It's very hard to feel much sympathy. Oh, and if they think those drone picks of the queries that they have on the homepage are clever, give me a break. Magnificent, go summarize this, jack. So I'm right in the obituary. Oh, and reports of the death of the seven, they aren't premature. They are late. They are finished.

And if you use the term, you are warned. The seven is now dead to me. I like to say there's always a bull market somewhere, and I promise to find You right here made money, I'm Jim. See you tomorrow. All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNPC or its parent company or affiliates and may have been previously disseminated by Kramer on television, radio, internet, or another media.

You should not treat any opinion expressed by Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither C N B C nor its affiliates andor subsidiaries warrant its completeness of the case. And it should not be relied upon as such. To view the full Mad Money Disclaimer, please visit CNBC.com forward slash madmoney disclaimer.