The Bears Better Be Prepared for Blastoff

Jim Cramer TheStreet September 7, 2010

Editor's note: This is the first of a four-part special by Jim Cramer. Here are part 2, part 3 and part 4. All of the posts first appeared earlier Tuesday on RealMoney. Click here for a free RealMoney trial, and enjoy incisive commentary all day, every day.

After an exhaustive look at every chart in the S&P Trendline's Daily Action Charts, my takeaway is that the bears will have to push the market back this week, because soon we'll see so many breakouts that the bears will be like Custer. Then it could be all over, and the market could rally 10%. There's so much on the line for bears who have mauled us every time it looked like we would break out. Right now, given good recent economic data, the bears look surrounded. The charts show an extraordinary turn from just two weeks ago, with whole groups' charts going from struggling, almost lethal pictographs to what look like definitive bottoms, bases for taking off, outright breakouts and -- in some cases -- blastoffs that show no signs of retrenching. Let's call these the four "B"s. Lets start with the blastoffs. The bears are going to have to rout these extraordinary runs because these stocks are beckoning others onward and embody tremendous themes that have held up throughout this tough, tough year. The first is Salesforce.com(CRM), which represents anything and everything cloud. (See chart below.) We know cloud computing isn't going away. In fact, with Salesforce.com dominating cloud software, the fight is now definitively over cloud hardware, as defined by the brutal war of attrition between Dell(DELL) and Hewlett-Packard(HPQ) over 3PAR(PAR). I think either company would have been better served giving up or merging with EMC(EMC)/VMWare(VMW), which is looking a lot like the real winner. VMWare is in blastoff territory for certain even as the EMC lags. We have so few pure growth companies like VMWare that we overvalue them, but EMC's overvaluation doesn't extend to its parent EMC, because people view EMC as a slog-growing plodder, a la Hewlett-Packard(HPQ). People forget that EMC owns almost all of VMWare. What to buy? I would take a shot at NetApp(NTAP) here simply because although it has moved a great deal it has to be the most desirable play in the cloud-related book. 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