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August 13, 2013  Tue 8:15 AM CT

Caterpillar is getting worrisome ... for the bears.

Here's a company that reported a terrible miss and a guide-down of vicious proportions. It was arguably the worst non-tech stock reporting in the Dow.

And yet here's the stock right back up at a time when China's stock market appears to have bottomed and the miners and mineral plays have come alive.

Now, I am mindful of how poorly run, financially, CAT has become. It used to be a gem, especially when it had a long-term roadmap. But then the company drank the Kool-Aid, became cocky, and even made a ridiculous top-of-the-market purchase of Bucyrus. I think they would pay half if they bought it now. Who the heck knows what happened with the Chinese company CAT bought (a total hoodwinking).

TheStreet.com logoThe great thing about when CAT reported? It seems to be at some sort of short-term bottom. That's why I keep thinking about the short call by the very good short seller Jim Chanos as last months' Delivering Alpha conference. Of course, it might turn out that Chanos shorted the stock at the absolute high and covered at the recent low. None of these short sellers, with the exception of Ackman on Herbalife, ever gives you the whole story until after the close out.

But right now it seems that the mineral complex, so important to CAT, has bottomed and that the big secular bear case seems tired. Remember, Vale's stock went down 84 percent from the high, correctly foreshadowed by an 84 percent decline in earnings. But now the stock's creeping back up after a better-than-expected quarter. Plus, Joy's going higher and, remember, that Joy's levered to Chinese coal use and Chinese electricity use, a good predictor of overall coal use, is going at a pace of high-single digits. That's terrific for CAT too.

I just think this stock's turned into a real crummy short. It hasn't been able to beat this $85 lid until today, although it's a tenuous $86, not a solid one. But if it does, I think that it could gallop right to $90 because, alas, the expectations have been taken out and shot exactly at the most dire moment in recent Chinese history.

Disclosure: Cramer's charitable trust is long VALE.
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