Viscerally negative, it wouldnt take much to spur a rally. Think about it, almost every stock in the s p 500 has been trashed for ages, except a narrow group of winners in 2015, the muchanointed acronymic f. A. N. G. Facebook, amazon, netflix, and google now alphabet. Yesterday these stocks were obliterated. They were gasping for air. The bear had sunk its teeth into their collective jugular. It was like sweet honey for the grizzly. As Bruce Springsteen taught us, you cant start a fire without a spark. When we left the office last night, i know we sure didnt have one. You know what i wanted to do . It was like the old days. I wanted to sip a bottle of cheap scotch on my dirty linoleum floor. When that closing bell rang, believe me, i would have. Cleanse that would suck the life out of anyone, stuff it with quinoa. I wonder how my old pal Johnnie Walker would go in my spinach smoothie that now passes for dinner at the cramer household. Anyway. Before i settled into especially side five of narcos, china was getting trashed as usual, and the now voting Federal Reserve member from st. Louis was giving a speech on fed policy this morning. Could there be a worse setup . My only solace, it had been years since we have been as deep as minus 8 on the s p capital oscillator, something i follow and swear by. The s p, folks, thank you very much, tell me you have to go all the way back to august of 2001, a pretty fabulous buying option, but you see another reading that negative like the one we had last night. Bought back then. For all that negativity, one by one things started falling into place for at least the session. First we got something positive that my colleague sara eisen pointed out this morning on her fabulous show. A front page article in the New York Times fairly prominently placed, headlined, u. S. Stocks continue slide on fears of slowdown. Wow, a onetwo punch. First you need the decline to be part of the american consciousness, everyone has to know how bad it is out there before you can expect any legitimate bounce, let alone a bottom. Second, finally the fed will feel defensiveness about its newfound hawkishness. Nobody wants to be blamed as the cause of the next recession, including janet yellen and company. Next, i was glad to see that china for once wouldnt stand in our way. No new Economic News from the worlds most populous country. There was one hopeful sign. The stock market there opened now, im sure thats just the communist party propping up things all over again, no long Term Solution there. Short term, though, it does seem like the governments buy program has its mojo back. Traders know that a market that opens low and finishes up dramatically is a market we might actually want to participate in, even if its phony. At the very least we know the chinese economists can manipulate the market up again, which is actually a positive. Third, oil actually, as we say, caught a bit. For two days oil flirted with breaking through the 30 barrier, something we all know number of failures in the industry. Today, by putting some distance from 29, there can be hope that things can get better in the oil patch, after two weeks of declines. Fourth, were now getting into the meat of earnings season. And how best to get it rolling zone quarter from large bank j. P. Morgan, delivering a remarkable number. Good trading results, no losses or charges of any import, and dramatically reduced risk profile via smaller balance sheet. Whats not to like . I cheered when i saw the release. So did the market. It looks like no one heard the sirens blaring from best buy, which reported a miserable holiday quarter. This wont be the case tomorrow as weve already got a disappointing forecast from intel and a shortfall from Analog Devices because of weak mobile phone chip orders, ouch. Finally, if what can only be described as a genuine miracle, the st. Louis fed hawk gave a thoughtful presentation where he might be much less worrisome than he thought, going into the december rate hike meeting, because oil had broken down so convincingly. His talk make you realize the fed isnt just staying there saying all that matters is employment, and since thats strong, we should keep it made you realize the fed is acutely conscious of another input, the decline of oil, and how it makes the possibility of inflation roaring back much less likely, therefore the fed doesnt have to be heavy handed with rate hikes. Second, it made it clear that the big increase in consumer consumption came to an end in 2015. Finally, in a veiled way, it told you that lower oil, rather than producing a series of blessings, seems to have having a negative impact on prices across the board. Wow. Thats about as close as were he ever going to get to hearing a hawkish fed board member say, wait a second, lets hold off on more hikes, at least until we see some signs of inflation rather than deflation. Remember what i said, you dont need all the boxes checked. But when the fed board member who is perceived to be the biggest champion of lockstep rate hikes starts to notice that vastly reduced, you can pretty much take all that chatter about the urgent need for four rate hikes off the table. You couple that with slowdown fears, and the flash crash lows, another box i wanted to see check before the index ignited skyward. Thats the most bullish script possible. When you put all these positives together, f. A. N. G. Facebook, being taken out and shot, the selloff making the front page of the New York Times, the most negative oscillator readings since 2011, a nice rebound from the lows in china, a prominent rally in the price of oil, and a successful retest of the august 24th lows, not to mention the most prominent fed hawk blinked, you have the spark that created the flame that engulfed this days sending the bear back to her dirty linoleum den. I would use it to get out of the stocks at better prices than you ever could expect, just 24 short hours ago. Im going to sam in texas. Sam. Caller jim, big booyah to ya, dallas, texas. Holy cow. Say hello to mark cuban. Whats going on . Caller jcp, ive been off and on the last several years, i made a little money. Is this ever going to go back to its glory days . I think its seven bucks, maybe catch a buck trade. You could make a buck. Phil in massachusetts. Fill. Caller hi, mr. Cramer. This is phil from massachusetts. How are you . Caller good. Thank you, phil. Caller my question is concerning walgreens. Is it a buy, sell, or hold . My travel trust has a huge position in walgreens. The stock did not go up initially today because they thought they were going to buy webmd. When that was dispelled, walgreens took off. Its a huge buy here. The quarter was fabulous. Dennis in michigan. Dennis. Caller yes, hi, jim. Jetblue, like the other airline stocks, are down over the last several months. Jetblue over 16 . Yet the oil prices have been down significantly. The air lines should be thriving in particular with the capacity in the bookings. What is up . A lot of people feel that the airlines, theres finally been some price competition out there, thats worrisome to people. Thats why people feel the earnings estimates are not going to be made. I might talk more about that later in the show. Rick. Caller yeah, the 2014 budget bill contains an amendment to prevent the department of state to prosecute states for selling medical marijuana. Do you think gw pharma is a spec stock . Most certainly. This is company that has Legal Marijuana from overseas. But the studies have been mixed of late and no ones really championing the idea of having this kind of what would be a staple form of marijuana. The stock is not working right now, but no speculative stocks are. Its all about which boxes are trying to be checked. Some big issues were addressed over the last 24 hours, addressed, not fixed, okay . At least for now. On mad money tonight, think youve found a bargain in this market . Not so fast, it could be a value trap. Ill explain. When all hell was breaking loose in the averages, did you just something . Ill tell you why you should pull yourself up by the bootstraps. And one Biotech Company that solves your headache. Ill reveal that ahead. 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. Degree gave women a motionactivated wristband to understand how much they move,. And created degree with motionsense. The worlds first antiperspirant activated by movement, bursts of freshness all day. Keeping you fresher with every move. Motionsense. Protection to keep you moving. Degree. It wont let you down. Here in the city, parking is hard to find. Seems like everyone drives. And those who do should switch to geico because you could save hundreds on Car Insurance. Ah, perfect. Valet parking. Hello heres the keys. And, uh, go easy on my ride, mate. Hm, wouldnt mind some of that beef wellington. To see how much you could save on Car Insurance, go to geico. Com. Ah car alarm sounds im here at my house, on thanksgiving day and i have a massive heart attack right in my driveway. The doctor put me on a bayer aspirin regimen. Be sure to talk to your doctor before you begin an aspirin regimen. Go talk to your doctor. Youre not indestructible anymore. Parents help their children discover the world animals, seen those before but sometimes they do it on their own mmm foot wow food for giants oooo no wonder no one has eaten this sandwich kids discover the world with their mouths detergent is harmful if swallowed, so keep laundry pacs up and away from children after a rare day like we just had, you know, what its my job to do . Ill stop you from letting certain stocks become dangerous. Tonight i want to warn you about the pearls of whats known as value traps. I see a ton of them out there in this environment. What exactly is a value trap . Its a stock that initially appears inexpensive but it eventually turns out the only reason the multiple looked low was because the earnings estimates it was based on were too darned high. And when the numbers start coming down, the estimates start coming down, the stock is obliterated. This can be a difficult concept benchmarks. Its a great tool that allows you to figure out what the market is willing to pay. It gives you a way to make apples to apples comparison between Different Companies in the same industries. Typically we view that stock as inexpensive and assume it cant possibly have more downside. Weve seen stocks with incredibly low pe multiples languish or get blown out. These are the value traps im talking about. They can fool you if you dont know had a to watch out for. In what cases should we view a low pe multiple with suspicion . This method of valuing stock has two components. Were always focusing on fluctuations in whats known as the multiple or m of what well pay for the earnings. But the other part of the equation, the earnings themselves or the e, can if these earnings estimates are too high, then a super low multiple can be a huge red flag, because its signaling that the numbers will need to be cut. And rising or falling earnings estimates are still the number one driver of higher or lower stock prices. Let me give you some hard core examples so you understand how these value traps look in the wild. First, how about a stock with one of the lowest multiples in the s p 500. Im talking about ensco. Its fooled so many people. Right now it has an 11 stock allegedly trading as low as 4. 9 lower than wall streets estimate of 2. 27 per share. Thats the average of all the estimates put out there by the analyst community. In a vacuum that number seems extraordinary, what a bargain, especially at a time when the average stock in the s p is selling 16 times earnings. Given that their stock is down 80 in the last two years, wow, i think you would be dead wrong. The problem, it only looks low right now because the earnings estimates are still too high. The fact is the companys core offshore drilling business is eroding right before our eyes, as high cost offshore Oil Production is simply not economical with crude here at 31 a barrel. The day rates for these offshore rigs of ensco have plummeted. This whole industry will continue to be in a house of pain. And many of the Smaller Companies may not even survive in their present form. In that case, ensco is likely going to have to slash those earnings forecasts again. And worse, they may need to cut the dividend again, even though they already slashed your payout cents a share. In short their low multiple may seem enticing. To quote everyones favorite line from star wars, its a trap. That low multiple is signaling investors dont trust that ensco will even be able to come close to meeting earnings estimates, which is what makes the stock a value trap. Once you learn faith in the earnings, the pe multiple is meaningless. Theyve been a value trap for years now. It appeared to be selling for eight times earnings, but of course the company has consistently missed those numbers by a mile. Hence the stocks vicious 80 decline over the last couple of years. I think it could still go lower. When it was in the 50s, i had it for my travel trust. I thought it looked so cheap. Fortunately i got out before too big a loss. It was a loss. Next up, its possible to be fooled by a companys overall consider ibm. Back in 2012, their old ceo projected 20 per share by 2013. Threeyear projection. The stock surged up to 215 in 2015. Of course ibms business has been in free fall for ages. They had to slash that forecast down to 15 and now its looking like even that number may not be attainable. The stock turned out to be very expensive, particularly those who have watched the 70 slide in the stock. Heres one that might seem counterintuitive. The airlines. United continental is trading at 5. 5 times earnings. You would think these stocks would be bargains, especially since jet fuel is in free fall. Why dont people believe that united and american can make those numbers . Right now the airlines are caught in many different markets with a vicious price war, reminiscent of how this industry used to be for decades before the newfound era of good feelings a few years ago. After unfortunate terrorism fears, a Global Economic slowdown, and its easy to see how the real earnings may be a lot lower than the estimates, which means the stocks could have a downside, although im more inclined to be positive on southwest and delta. Scx has an ultralow pe multiple, plummeting from 60 in 2010 down to 4 as of today. Of course that low multiple made investments think they were unattainable, and they were right with the commodity collapse. Analysts thought u. S. Steel share. Instead they lost 3. 49 in the first three months of 2015. Turns out the multiple should have been a negative number. If todays bouyant stock makes you want to pick a stock with a low price to earnings multiple, just remember not all of them are cheap. Ensco, ibm, freeport, you might just be looking at a value trap. Thats why you have to rethink your notion of whats keeping. Because something that seems cheap now could very well turn out to be very expensive and costly to you later on. Much more mad money ahead. Biotech has been one of the worst performing sectors in 2016. Could one companys rise today be a turning point . Then it seems like a fight or flight moment for the averages. Whats your choice . Why it may be time to buy on the and stocks may be off to the worst ever start since the new year. That doesnt mean you cant protect your profits. Ill make sure you do. Stick with cramer check this out, bro. Whats that, broheim . I switched to geico and got more. More savings on Car Insurance . Yeah brofessor, and more. Like renters insurance. More ways to save. Nice, brotato chip. Thats not all, brotein shake. Geico has motorcycle and rv insurance, too. Oh, thats a lot more. Oh yeah, im all about more, teddy brosevelt. Geico. Expect great savings and a whole lot more. Ive been on my feel all day. Im bushed yea me too. Excuse me. Coming through ride the gel wave of comfort with dr. Scholls massaging gel insoles. Theyre proven to give you comfort. Which helps you feel more energized. All day long. Lilly. She pretty much lives in her favorite princess dress. But once a week i let her play sheriff so i can wash it. I use tide to get out those week old stains and downy to get it fresh and soft. You are free to go. Tide and downy together. Hey buddy, lets get these dayquil liquid gels and go. But these liquid gels are new. Mucinex fast max. Its the same difference. These are multisymptom. Well so are these. This one is max strength and fights mucus. That one doesnt. Uh. Think fast you dropped something. Oh. Ill put it back on the shelf. New from mucinex fast max. The only cold and flu liquid gel thats maxstrength and fights mucus. Start the relief. Ditch the misery. That only afflicts bull markets. It can also be too complacently negative out there. You can be too comfortable in your belief that everything will keep going lower no matter what. Its the other side of the coin. Yesterday traders dismissed it as one more day of horrible action. But the ones who sense that stocks are getting too cheap, they can change their view. They look like real winners. Last night i said my travel trust did some buying in the last hour of trading because it was so ugly and miserable you had to pull the trigger. And we did some buying on a few stocks where we had set price levels long before the heat of the action. So when those levels were reached, we had no choice but to do some buying for the charitable trust. Thats called basic discipline. We couldnt just abandon it and say, its really scary out we said we were going to do when these stocks were higher. No. We went in, methodically and coolly, and picked the stocks. Believe me, i sure didnt want to. I mean, it was painful to pull that trigger. And i really didnt want to come out here tonight and admit that the trust had bought stock and then seen the market drop another 2 or 3 which i think was the perceived wisdom when we left last night. Oh, i wanted to waffle. Then i got a reminder that you cant freeze up and stay negative when stocks start hitting levels where you figured they would be buyable based on homework done during a less emotionally charged moment. I had said if we got back to certain levels, you have to do some buying. I heard from someone i regard as a tremendous trader yesterday afternoon who didnt have a ton of cash and heeded the market for a very long time. She had been waiting and waiting f. A. N. G. Facebook, amazon, netflix, and google and for everyone else to join her in hitting the market. Finally she sensed her moment had come. I had to agree. If not now, she said, then when .