Thrown in front of approachable rallies. Well, that we would normally perceive to be realistic and commonplace, youd normally get stocks to go higher, but not this time because of the gauntless. The average warred ahead and pulled back to limp into the close. Dow going on to close up just 26 points. S p gaining merely 0. 3 . Nasdaq advancing only 0. 15 . No companys immune from this gauntlet, including companies regarded as the best in show. Sherwinwillia sherwinwilliams, even apple and amazon who reported tonight after the bell, and ill have more on later. Lets go on how a stock can get through the gauntlet to the promised land, and what can cause it to get trapped and ultimately hammered into oblivion if it doesnt. The first leg of the gauntlet is, is the company beholden to europe to make its numbers . Youve got to ask that before every stock every stock you own, ask that question. Pretty simply, almost every industrial has got exposure to europe, and that goes double for the technology stocks. This, by the way, and not the fiscal cliff, not the fiscal cliff, is behind the vast majority of the hideous shortfalls weve seen in company after company, especially those in the personal computer and dumb phone food chain. But its also snared the usual winning suspects. Google got hit by avnet. Theyve been pretty reliable. Its not just tech. Vf corps has been sliding relentlessly because they made a couple of negative references about europe. Thats all it took. I see no negative on the rises. Dont expect these stock fortunes to change. Step two of the gauntlet, does it have exposure to the election and the fiscal cliff . You want to see how vicious this part of the gauntlet is . Do you know the most legitimate big cap upside surprise this week came from boeing . Boeing. Which jumped a buck and a half, all the way up to 74 and change, at the open yesterday, after reporting a pristine number. And its been down ever since. Because people perceive that its defense business will be crushed by a congress that cant avoid the fiscal cliff, even as this commercial air Space Business is clearly on fire and no one doubts that. Plus, romney has been making a ton of noise s about how to fix the deficit while still allowing more military spending. No one cared about boeings upside surprise. The stock cant seem but stop going down. Until the election and the fiscal cliff resolve themselves, we could tread water on these issues too. And then this one is the most fascinating, because its in flux right now. The china test here the data depends on the day. Its day to day with china. Youve got a knife where the data is strong, out of china, its good. You get weak, its bad. Got strong, cummins goes higher. Same with a stock like timkin. Remember them . The ohiobased industrial we visited last week which reported a shortfall, but a lot of that shortfall came from steel thats made in china you get china to turn around, this part of the gauntlet can be breached. But every piece of chinese data is potential to call the whole enterprise into question. Call it too, lets say, unresolved for now. However, i am leaning personally, heavily toward the idea that china has put in a bottom and 2013 will be better. Thats why my charitable trust, which you can follow along at actionalertsplus. Com, is heavily weighted towards industrials that do business with china, and yes, has a position in the Chinese Market itself. Once you make it through these first parts of the gauntlet, youve got to get through perhaps the most miserable portion of all, and also least understandable, which is why were going to spend a few seconds explaining it. Its the expectations leg of the gauntlet ive been talking about all week. Let me demonstrate by using the curious case of Tractor Supply. The rural locator, something that mom and pop feed and grain Stores Currently offer, Tractor Supply takes it to those guys. Because its got the Critical Mass and scale to be able to buy the goods cheaper than the mom and pop feed and grain outlets, and it can therefore sell the goods less too. These mom and pop outlets can buy from the Tractor Supply. Last night the company Beat Estimates and raised its forecast. Formerly the holy grail of earnings. Isnt that what he like . Tractor supply dropped 2. 28 or 2. 4 today. Its crying. It simply didnt beat enough, it simply didnt raise enough given that the stock was already up 33 going into the quarter. Tractor supply had been flat or down, that combination would have sent its stock up huge. Just go ask the people at procter gamble, which led the dow today on a beat and raise that was only a fraction of the upside surprise of what Tractor Supply delivered. But proctor was up a lot less going into the quarter. People expected very little. So it was much easier for them to clear the expectations hurdle and slip right through the gauntlet. You can put many stocks through this exact same prison, under armour. It beat and raised in tremendous fashion, but it fell 3. 69 today, as if it had failed to do either. Thats what happens when you have a stock thats rallied 47 coming into the year. Yes, 47 , under armour has been up. I dont know if it would have mattered what they said. And speaking of it doesnt matter what they said, what about sherwinwilliams . It gave you a terrific beat and a fabulous raise, but it was neither terrific or fabulous enough, not to keep the buyers in, because the stock had rallied 60 since the year began. I think that sherwinwilliams can rally back to where it was, but it might find itself trapped in different portion of the gauntlet, the one that says if romney wins, he will fire bernanke, and if bernanke is fired, youll see a raise in mortgages, which will crush the housing boom which has powered sherwinwilliams in the first place. What about regeneron, the Biotech Company that has been a longtime cramer fave. It needs to be shot into the eye once a month, its real expensive. But the alternative is a shot that has to be shot into the eye every week. 12 shots or 52 less expensive shots . The competitive drug comes into a big, expensive vial. But this year the fda has said that process could conceivably cause meningitis, no outbreaks, but it could. What could be worse than getting a shot in your eye once a week . What about the chance that the shot could give you a lethal case of meningitis. So last night regeneron reported 1. 85 in earnings yesterday. The street was looking for 1. 15. Hear that . 1. 85, we thought 1. 15. We keep hearing that market prospectors are disappointed with the performance of revenues. Not with regeneron. Regenerons revenues came in with gold medal. But regeneron was down 7. 46. Why . Simple. You cant get through the gauntlet unscathed if your stock is up 180 for the year, while going into it. The expectations were so great that no amount of beating and raising would have been enough there. Everything has to be put through the gauntlet, every stock, including apple. Apple reported disappointing numbers tonight. We didnt get the right ipad number. Iphones were good, werent blowout. And the stocks down 10 from its high going in, so you would expect that it would bounce, right . But its up 50 for the year, it so needed to do better to stay lofty. So the gauntlets taking the lets just say, upside out of apple. Oh, amazons the toughest of all. Its made a habit of reporting lower than expected numbers. Tonights no different. Which should clock it, given that its up 28 for the year. But when the stock quickly dropped 15 points, buyers rushed in, because many dont feel amazon is an investment story, which makes the gauntlet run less hazardous. As for many, amazon is a sales, not an earnings story, and sales were basically in line. They dont look at that bottom line. Suffice it to say, if the stock were flat for the year, amazon would be up huge tonight. Instead, its not that much, because its not that much of a needle mover and the buyers seem to love it no matter what. Heres the bottom line. I cant recall when the gauntlet to go higher was this big. For many stocks, we get lower prices and then remember, almost no company gets through the ridiculous gauntlet of the Third Quarter of 2012 unscathed. Dorian in texas . Dorian . Caller booyah, jim, hows it going . Real good. How about you . Caller im doing just fine. Say, i was laooking into this recent wave of housing reports that have recently come out of homes, by hlv, and its been performing is very well. Ive been trying to pick a new buy price and i wanted to get your outlook on the stock. I was and wondering how you felt this looming fiscal cliff could affect the Housing Market overall . Its definitely going to affect the Housing Market. If you think romneys going to win, you dont want to own the housing stocks. Why . Because bernanke has been the biggest supporter of housing stocks. If you want a better play, i would go with polty or lennar. Lets go to john in massachusetts, please . John . Caller hey, ba booyah, jim. How you doing from halifax, massachusetts. My question is about best buy. My son has a bunch of stock, he worked for the company. Is there a buyout . Wheres it going . Theres no buyout. I believe the Balance Sheet is bad. Companies that have bad Balance Sheets tend not to get buyouts. I think your son should be scaling out of the stock. I think thats important. I mean it. I think he should be selling the stock. Lets go to ron in california. Caller jim, booyah from beautiful san clemente, california. My wife, adele, and i love you. We love the show. I want to say thank you so much for the tips on ross stores and harley davidson. I made money on both of them. I like that caller and i own a Packaging Company too. Anyways, professor, i want to know your views on wynn resorts, las vegas sands, and baidu. Com. Baidu, im not that interested in. I like the whole chinese index. Las vegas sands is good. I think wynn is excellent. The dividend is excellent. Steve wynn had maybe one of the best conferences after facebook. It was really magnificent, and he talked about tax policies and dividends, made me really want to own the stock. I think youre fine there. The gauntlet, it is brutal. The gauntlet is unforgiving. But its unavoidable for stocks, until europe gets better, china gets more clearer, the election is behind us, and the fiscal cliff is at last history. Mad money will be right back. Coming up next, box cutter . International paper got burned today after disappointing the street. But, should you think outside the box and buy the stock after its decline . Dont miss cramers earnings exclusive with the ceo. And later, patently false . Concerns over santa fes patent cliff seem to be passing as the drug giant reported better than expected earnings today. But can it continue to fend off competition, or should its condition take a turn for the worse . Cramers talking with its cfo. Plus, chip check. Lsi semiconductor beat the street last night, sending the stock skyward. But despite the move, its still lagging the averages this year. Will it continue to play catchup . Cramer sits down with its ceo. All coming up on mad money. Dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmu madmoney cnbc. Com. Or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. Bob. Oh, hey alex. Just picking up some, brochures, posters copies of my acceptance speech. Great its always good to have a backup plan, in case i get hit by a meteor. Wow, your hair looks great. Didnt realize they did photoshop here. Hey, good call on those mugs. Cant let em see what youre drinking. You know, im glad were both running a nice, clean race. No need to get nasty. Heres your honk if you had an affair with taylor yard sign. Looks good. [ male announcer ] fedex office. on banners. Hey, its sandra from accounting. Peter. I can see that youre busy. But you were gonna help us crunch the numbers for accounts receivable today. I mean i know that this is important. Well, both are important. Lets be clear. They are but this is important too. [ man ] the receivables. [ male announcer ] michelin knows its better for xerox to help manage their finance processing. So they can focus on keeping the world moving. With xerox, youre ready for real business. Companies have done everything they can to take control of their own destiny. But what happens when a company with fabulous execution, nevertheless, manages to miss those posted numbers . How about the case of International Paper, ip, largest maker of containerboard in north america. Many are hostage to the fortunes of the broader economy. But International Paper, under the leadership of its terrific ceo has been transforming itself for years, selling off its land holdings, shifting from paper towards packaging products, and then buying Temple Inland earlier this year in a really fantastic deal thats allowing them to cut costs left and right while taking out a ton of capacity. And International Paper pays you this juicy yield. They raised the dividend earlier this month. The company delivered what a lot of people thought was a twocent earnings miss, and revenues came in a tad light, rising just 5. 9 for the year. In response, the stock got dinged. Of course, more importantly, it had a huge run going into the quarter. This is another case where Great Expectations meant the stock probably had to give up some points. Now that its pulled back, though, is it worth buying . Lets check in john faraci. He has a better sense of the quarter and what comes back. Mr. Faraci, welcome back to mad money. Good to see you, sir. Thank you so much. Please have a seat. We think this is the case. I went over this with stephanieling, my research director. We said this was the case of a stock that had gone up and up and up. It may not have matter what you reported, because there really wasnt anything that was a surprise. You had said there could be some down time, and thats what happened here. Sure. So are we in a position to say the whole merger that we love so much is still have ever on track . Absolutely. We had a 300 million merger target in two years and we got to that target in less than nine months. So were going to employee right beyond the 300 million. And its more faster. The Temple Inland integration is going very well. And i think this time next year, well be optimizing the business, not integrating pit. Okay, if thats the case, youre probably, of the largecap ceos i deal, youre the most prodividend of anyone. Youve been saying that over and over again. So the board will consider over time taking the dividend even higher. If all those if the Temple Inland stuff comes through. In todays global economy, it certainly is challenging, the fact that the board agreed to raise the dividend, in the fourth quarter, i think is a reflection of their confidence in our ability to generate strong, free cash flows, even in this kind of economic environment. And were pretty positive about next year. Steel, they havent been able to put through any price increases. Aluminum, theyve had to cut price. Zinc, cut price. Iron work, tremendous price cut. Coal, you guys put through a 50 price increase. How is that possible . We havent had a price increase in nearly 2 1 2 years. And at the end of the someday, these are all about supply and demand. And when we looked at the supply and demand from our perspective, we saw that as a needed opportunity. Because prices hasnt moved. Theyd been basically flat for over two years. Okay. Now, International Paper, when my father did work for it, was domestic paper, frankly. They could have called it national paper. You are truly International Paper. On october 10th, you told closing bell, i think chinas growing far less than 7 . They slowed down and it feels more like 2 or 3 . I know thats not that long ago, but were starting to hear people saying, they recognize that, and theres beginning to see some green shoots in china. Well, i was in china a month ago. Okay. And our business over there is about half shipping to companies that export the products. The products leave china, and the other half, products that stay in china. And the half that goes out of china, has really gotten hammered. Its down 15 to 20 . Theres still growth in the domestic market, but when you put the two together, its starting to like its 2 to 3 gdp growth. But i dont think thats structural, thats cyclical. Chinas going through an adjustment, they have a new government thats coming into place. Theyll get their focus on the economy, with and when the chinese do that, they typically do a good job of executing. Well, youve also had tremendous growth in other bric countries. Brazil has been a big focus for you. Its working, right . Weve been in brazil for 50 years. We got in the paper business first, and as you know, yesterday, we announced the acquisition, 75 acquisition of a corrugated box company in brazil, which really puts us into the number two or number three position in a growing market. Between mexico and brazil, thats almost 60 latin american corrugated business. Weve got a strong position in mexico and now weve got the footprint in brazil. Now, when my dad was selling corrugated paper for International Paper, the one thing that we knew was that only wholesalers knew what corrugated paper was. It used to be one of those things where big businesses knew. We all get packages now at home. We come home every night and theres a package from amazon thats in corrugated. Everybody ships them because of the internet. How do you think that the Holiday Season is going to be for International Paper, because of all this internet ordering . We were talking about that this morning, with, you know, one of the interviews, and when you slice apart our corrugated packaging business, it goes into so many enduse markets. And Online Retailing la ining l, at this point, its going to be stronger than last year. Because we see some strength in that segment of our corrugated box business as we go into the holidays. I know Federal Express and United Parcel talki