Cramer/CNBC Claim Obama Disapproval Numbers Match Stock Market Rise

Thursday, 20 Aug 2009
If Obama’s Health Care Reform Loses, These Stocks Win
Posted By: Paul Toscano
Topics:Stock Picks | Stock Market
Companies:Wellpoint Inc

Cramer has identified a correlation in the market that can be tracked quite reliably from the March low. What is it? Obama’s disapproval rating. How closely does Obama’s disapproval rate align with the actual market? If you take a close look, Cramer points out that the charts are practically identical, with disapproval for the President rising in tandem with the market’s huge run from the big March bottom. Coincidence? Cramer doesn’t think so.

The President’s agenda had investors worried about many parts of the market, but as the President becomes less popular - and correspondingly less powerful - the threat to those industries has waned and the entire market has rallied, says Cramer.

If some of Obama’s plans don’t work out - plans which much of Wall Street considers to be bad for business – such as card check, forced arbitration for unions, cap-and-trade and health care reform… As more people disapprove of the President,there’s nothing to be scared of, says Cramer.

And what is the sector most weighed down by the Obama agenda? Health care.

The charts are telling Cramer that the strategy is to get more healthcare into your portfolio and to go with gold as a hedge against the dollar. He sees the possibility that the entire health care complex could move much higher if Obama’s approval falls. If Obama has squandered much of his political capital, the defeat of his potentially damaging legislation may be more likely, and good for investors in those stocks.

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What’s the bottom line? Obama’s unpopularity on the rise and with this, his agenda is imperiled. This should encourage you to buy the stocks of companies that stood to be hurt by the President’s agenda, especially in health care stocks and HMOs in particular that are due to go much higher thanks to multiple expansion. “We've been positive about this group since it became clear that the agenda's stumbling, now it's time to go pedal to the metal on this beaten down sector,” says Cramer.

video here- http://plus.cnbc.com/rssvideosearch/action/player/id/1221268443/code/cnbcplayershare

story here- http://www.cnbc.com/id/32498633