0. 19 , nasdaq declining 0. 44 today. Ominous. Now, look, only in a bull market of Epic Proportions would we even think of asking such questions. Selloffs are a natural occurrence, and if they never happen, guess what. We wouldnt be so fixated on dow 20,000. Weve been fixated on dow 200,000. Of course that doesnt mean theres no reason for the decline or that we can ignore it. So lets go there. Lets explore whats sending us lower so we can figure out whether this is a simple garden variety profit taking move or something more significant that we actually need to worry about. First when disseconding any down tape, i like to ask myself which is the Leadership Group that was most bearish . Today it was retail. The standout negative narrative, the nasty miss by bed, bath, and beyond, a general merchandiser with a home emphasis that missed its projections by a mile, earning 85 cents when the street was looking for 98 cents. Negative 1. 4 samestore sales, much lower than the gain people were expecting. Thats quite a miss. Now, oddly the company was pretty cold blooded about the miss on the call saying that sales were soft around the election, did get better around black friday. But the fact is that bed, bath, and beyond is once again in a rebuilding year, think like sports, okay. This time building around one kings lane, their home goods catalog offering as well as personalization mall whi. Personally, i could hardly believe the shortfall given how much my wife spent this quarter and fiscal year on one kings lane merchandise. But clearly even her buying wasnt enough to get bed bath to the Promised Land of positive comps. That means a lot of other people couldnt have been buying. More important, the stock had been coming back. As investors had been betting that both housing related items and retail in general might be doing better than we thought. I dont know whether to extrapolate as easy as the street did, but the miss was nasty, causing one of the biggest long time supporters at Raymond James to go from strong buy to hold with this little note. Quote, we now will need to see even some scintilla of evidence of improvement before again sticking our collective neck out and recommending new purchases of bed, bath, and beyond. Ouch that negative pivot was one of the reasons why the stock was down 9 today. Bed baths woes cascaded down the retail group. It certainly didnt help that most analysts were caught looking the other way with an expectation that the Colder Weather and the confluence of hanukkah and christmas at the same time would produce a spike at the end of the quarter or at least after the quarter where they could talk about not a decline. But we didnt get that kind of positive chatter. On top of that, many were shocked yet that finish line could report such hideous numbers in light of the fact adidas and underunder armour were supposed to be taking pieces of a larger pie even as nike may not have been doing all that well domestically. Other than matthew boss, the analyst from jpmorgan, who told us that according to nordstrom, mall traffic is the worst its been since 1972, theres been a lot of bullish commentary about retail since the election. A lot of it anecdotal, but it looks like this key group may have less going for it than we thought. The normally strong home goods category, it might be going down with the ship along with the already weather beaten apparel companies. Thats how people felt after todays trading. It doesnt help that now were hearing rum blings of a cross border tax on imports, Something Else that boss flagged earlier this week. Of course our retailers import hundreds of billions of dollars worth of items, and that tax will have to be eaten by the retailers themselves as theyre very little gives these days among relentlessly sharp consumers. Not even the lower taxes so many are expecting, individual taxes from the trump administration, can mitigate the kind of grow margin decline a true tariff like that would accord. The next disappointer . Red hat, which well be hearing from later. If you use open Source Software and you want to switch to the cloud, theyre pretty much the only game in town. However, if red hats the only game in town and theyre having this much trouble closing deals, which they are, then could there be a broader slowdown going on in Information Technology spending . Thats what people were talking about. If so, lets connect the dot. Workday had problems closing deals. Oracle had strong cloud numbers but weak on Premises Software numbers. Yesterday accenture offered tepid guidance. Red hat spins a new negative stoif about tech spending and what was supposed to be the hottest area out there. Maybe after we talk to the straight shooting jim white hursz, we can reach a different, more positive conclusion. I bet the company uses its considerable cash on the Balance Sheet to buy in a ton of stock here after this decline. For now the trend is certainly looking worrisome. This days when we see a chink in the cloud, we get all queasy about everything in the fang cohort. Just as they were the bright light last year at this time, theyre now an area of total vulnerability even as many of them have been putting up great numbers. Theyre all seen, well, i think that we understand what kind of cohort they really are. Not a trump stock, not a trump stock. Because they do well regardless of whether the economy accelerates because of trump and his probusiness agenda. Now, before we get too gloomy about tech, can we please pay homage to micron, which reported a magnificent quarter even though they preannounced the upside not that long ago. It was the kind of upstart surprise you dream of, created by not enough supply of derams and flash remy chips to meet the incredible demand out there. Western digital with its flash products and lam research, another one of my faves, two giant Semiconductor Equipment companies that will have to get new orders in order to sate all this demand. Micron stock vaulted 12 . Yeah, its that good. Heres one totally from left field. Conagra trounced estimates. The makish of goods that we find in our pantries like swiss miss, ready whip, Orville Redden backers popcorn, and hunts tomato iterations, brands they identify as iconic showed an impressive turn with better earnings and real margin improvement. This group has been shelled lately. Its become widely viewed as uninvestable. Not today. Plus oil rally, putting one morbid under that group. But it generated no pin action away. Remember when the old market used to go up when the oil stocks went up. The other fang, which is the symbol for diamondback energy, did jump 1. 28, though. That fang is doing so much better than the other fang. You know what i think . After endless days of rallying, it makes sense we cool off a bit, especially when even ardent trumpites, people like carl icahn telling us that short term, hes worried about the market. But lets lets put an asterisk on that. We dont want to come into 2017 so vulnerable that we can repeal lots of our recent gains. I dont think things are as negative as some of the retailers indicate. We just got good numbers the other day from carnival and darden although neither is mallbased and neither would get hit by import taxes if we get them. Also this is a rally led by the financials and theres still no flies in that group. Heres the bottom line. I say we have to get used to having some down days because you didnt get up to dow 19,975 or thereabouts without them. And you wont get to dow 21,000 or any other number without them either. Detours, theyre acceptable, even logical along the way. And perhaps we finally hit a real one. Lets go to jim in arizona, jim. Caller mr. Cramer, thank you for taking my call. Mmhmm. Caller i bought Palo Alto Networks before the moving average back on december 8th at 131, but now im down 4 1 2 . Did i make a mistake . You know, i asked bruce kamich, whos therrific, and th charts just okay. The stock is expensive. This group is for sale, but i dont want to sell palo alto down here even though i didnt like the quarter that much. I think you have to hold on to it, but the chart is bill in my home state of new jersey, bill. Caller how are you doing sir . Good how about you . Caller pretty good there. I bought First Republic bank stock back in the summer. Doing pretty good with it so far. Im just wondering what your thoughts were on keeping it as a long term investment. Oh, yeah. Thats actually what you want to do. I dont even want to this is one its good, and you just hold it, and thats really about all there is to say about it. How about jacob in colorado, jacob. Caller hello, mr. Cramer. Nice to talk to you. Same. Caller i recently received a few shares of add van 6 as a spinoff from honeywell, and i wonder whether you think its worth purchasing some more. Heres what we have to do. We have to do a full piece on that. Were going to have to huddle. My thinking by the way, remember, dave cody is about to retire, the great ceo of honeywell, and we like to see what happens after a ceo of a Major Company like that, who has done such a good job, does retire. He may be headed, by the way, for the wall of fame. Larry. My old friend larry in massachusetts. Happy holidays, larry. Caller jim, happy hanukkah, happy new year. Get a good rest, and you dont mind if we dont hold dow 20,000 for you. Do what you have to do. Thats the way i look at it. And the patriots will be in the super bowl, so you dont have to worry. Against the giants of all things. Unbelievable. I saw it in the press. Whats up . Caller hey, jim, with so many of the bond market yield equivalent stock oz so precarious but the financials and techs still thriving, would i be wrong to build a portfolio around cypress semi and ventas. Im concerned only because im concerned about the Real Estate Investment trust. Cypress, i think is a takeout candidate. I like your ideas, and once again larry from massachusetts, what does he have . Horse sense. All right. Dont worry. Its just a destours. Selloffs are natural. On mad money tonight, red hat reported yesterday. Oh, boy. Market didnt care for those earnings. Im going to talk with the ceo, find out if the drop could be a buying opportunity or a red flag. Then its the world oldest bank and it may be collapsing. What it could mean for us here at home. Plus im getting the yule lock ready. Join me during my fire side chat where im talking some questions with a holiday spin. Stick with cramer. Announcer dont miss a second of mad money. Follow jimcramer on twitter. Have a question . Tweet cramer, madtweets. Send jim an email to madmoney cnbc. Com or give us a call at 1800743cnbc. Miss something . Head to madmoney. Cnbc. Com. We got to talk about this. What the heck just happened to the stock of red hat . This is a Software Company ive liked for a long time. The worlds number one provider of linux based operating systems for business along with a host of other offerings for middle ware and Storage Software thats increasingly been moving into the cloud. Last night they reported. Today the stock got obliterated. Heres the thing. Even though red hat posted a three cent earnings beat off a 58 cent basis, the revenue came in by low wall street expectations. More important, we saw a deceleration in the all important key metric for this kind of enterprise software, which is billings, up just 9 , down from 19 and 16 in the previous two quarters. Thats a pretty big change and not for the better although it turns out this is mostly because some Big Government deals slipped into the next quarter, but there could be other reasons. Management lowered the revenue outlook for the rest of the fiscal year even as they raised their earnings forecast br a few cents. The cfo, a favorite of mine, someone who has come on mad money to represent the company, a rarity on a ceobased show, is stepping down in january. Ouch. Nobody likes it when the cfo steps down. This is obviously not what people wanted to see. But we have to wonder has the market overreacted with the selloff . After all, red hat indicated that billings would pick up against next quarter. The company is still signing a ton of big deals at higher prices. So is this a buying opportunity in the stock of a high Quality Company that simply hit a speed bump or do we need to be more concerned about its future . Lets check in with jim whitehurst, president and ceo. Mr. Whitehurst, welcome back to mad money. Hey, jim. Thanks for having me back. Jim, first of all, i am thrilled that you came on on an obviously tough day for the stock. It wasnt like you said, im not coming on mad money. I do have to ask you, though, when you say in your own words, we faced a few challenges that tempered the growth of some of the items in our results, i immediately think does tempered the growth mean that business actually got softer or competition came in to take business away . This was really a couple of specific deals. What we tried to convey on the call is we had phenomenal deal metrics across the board. Unfortunately, those were masked by a couple of large government deals that didnt close, which we believe was due to the continuing resolution legislation as well as the changing government. Those deals are on track to close now, and with those two deals, we would have been in mid teens. We even guided mid teens for next quarter on our billings number. We do think this was an air pocket related to two deals. In the conference call, it got very caught up in the notion of short term and long term. I have to side with one of my favorite analysts and friend, heather ballerinany, who said that she used it on the conference call. She said, i just dont understand it. Should we just did we get off track in the conference call. We can look at long term and short term, but what weve always said on billings is its volume di volatile in any one quarter. We did our best to explain that both the long term and short term short term was due to a couple government deals. Long term was due to some really massive deals that we did, and we called out two of the deals alone that were, you know, combined well over 40 million, which only billed one year at a time. If you put those two things together, thats about 47 million in billings which would have put us way, way, way over the top. So this really was optics around literally four deals and where they fell. All right. Were you happy yourself with the execution of your company this quarter . Oh, absolutely happy. If we look overall at the business, we continue to perform extremely well. We guided cash flow next quarter up 22 to 28 . We never guide billings because it is volatile. But because of the slowdown, we actually guided mid teens billing, so a rebound in billings, which is to convey that we see a lot of strength in the business and feel very good about where we are and where were going. So i just want to be sure. Those four deals that come back in, you would not have had that billings growth, and it would have been a better quarter . With those four deals alone, we would have had very high teens to low 20s billings growth, which would have been well above where wall street was. But you understand also, lets talk about frank, your cfo leaving. I dont have cfos on the show. Hes one of them. Hes one of them because he is key management. So when you understand that when he leaves, i dont like it when a cfo leaves candidly, and were showing some video of when he was here. But when you were not available, i was thrilled to have frank on because he is a great spokesperson for where he works. So you understand the impact. It was not just some cfo leaving. Yeah, i fully understand that. But i mean as you know, the quality of someone like frank calderoneny, hes an extraordinary executive, and he was always more of a ceo in waiting. You know, an opportunity came up, and he will be a ceo, and when he came to red hat, he said his aspiration was to be a ceo. So i fully understood that, and obviously the timings not perfect, but he has a great opportunity which ultimately hell talk a little more about in january. So, you know, i think this was to be expected at some point. Its just unfortunately is this quarter. We have a litany we have to address. Oracle reported a quarter that was really the legacy business wasnt that strong, but the cloud wasnt Strong Enough to offset it. Accenture said tougher times coming. How do we know red hat isnt part of that whole litany, that narrative . Well, thats why we tried to provide some guidance for q4 that we would say is actually quite strong. Again, cash flow up 22 to 28 . We guided that mid teens billings, a rebound in billings. Were trying to convey we see a very, very strong pipeline unlike some of the companies you mentioned. Some of those actually were okay in the dwaert and they actually guided down. We were the reverse. We had a soft patch in this quarter. If anything, we guided across most measures much more positively than we typically do. We try to be very transparent about the very specific down to the deal level of what caused this to miss on some of those metrics this quarter. Are you surprised that more people didnt key in on the fact that 25 of 25 of your biggest guides were up, and all 25 renewed, and they did so at more than 120 of their prior annual commitment, which to me is a better metric if youre trying to think longer term about red hat. Well, absolutely. We talked about every one of our 30 deals was over 2 million. Thats the first time thats ever happened. We had 72 deals in total that were over 1 million. Thats 20 more than weve ever had in a q3. So overall, we had really, really strong deal measures. But as you said, you know, this is a business thats measured on billings, and so billings was light. We worked to explain why, but certainly understand theres a negative reaction when that happens. One last question. We do have a new administration coming in. It does have a bit of a different tone to it. I know the first thing that president elect trump did was call executives, including some executives he thinks cost the government too much. Are you going into a new regime where the federal government may be even more slow because theyre concerned that the president may find out how much money somebody is spending on something and really want to take a look at it . We actually see that as a benefit for red hat in two ways. First off, we are heavily weighted in our government business to defense and intelligence, which i think conventional wisdom says well likely get more funding in a trump administration. Secondly, you know, as you know, in the fact that weve had literally 59