October 16th - Dow 12,000, SIX

Cramer started out by trying to explain the market run up as the DOW nears 12,000 and said it wasn't lower oil and good earnings. He said the 1 thing that is driving the market is the market mechanics and the way big institutions operate the market on a day to day basis and namely the momentum funds and their buying ways. Cramer said these funds basically buy at market prices and take as much stock as they can as opposed to under bidding the stocks. This drives up the prices (and likely draws people in) and hence moves the market up.

Next Cramer looked at Six Flags Inc. (SIX) and although he had a bad time personally at the park he recently visited and the numbers didn't look good he said that if they bulldozed everything they are sitting on valuable property.

Closing Price: $5.87
After Hours High: $6.53
Percent Increase: 11.2%
Price Level Off Point: $6.37
Percent Increase: 8.5%
Trades on NYSE
Sector: Services
Short %: N/A
Days to Cover: N/A
% Held By Insiders: N/A
% Held By Institutions: N/A

Not an overly compelling story for the long side of this trade. Are they really considering bulldozing the parks just for the land? Would they have brought in the ESPN guy to run the company just so he can do that? Even with the "limited downside", I don't think there is any reason for this stock to move 10% tonight considering it has been hovering around 4-5 for the last while. And looking at the chart from today there seems to be an unusual spike late in the day. Maybe someone got word of Cramer's recommendation and sent the stock up to $6.12 during regular hours before declining. If anything that might show that the stock will have a hard time holding any large gains tomorrow.

Finally Cramer spoke of Yahoo! Inc (YHOO) and said he expects their earnings estimates are too high and put a $12 target on the stock and said if he were at his hedge fund he would be shorting it. I am not a fan of shorting a sell pick from Cramer and the fact that they are reporting tomorrow it would be a play on earnings and not on Cramer which should only be done on ones own due diligence and I have no opinion on it. Cramer then threw a big curve ball and said YHOO could be a takeover target and said it wouldn't go for less than $30 a share. Sounds kinda funny to be buying out a company at 21 billion as Cramer mentioned the potential price tag because even if someone like Microsoft who Cramer said could be a buyer could afford it would they want to reduce their cash position that much? Either way, with earnings tomorrow for YHOO there is no sense getting involved based on Cramer.