CNBC’s Jim Cramer instructed traders on Monday that they should not let short-term rallies trick them into making optimistic buying and selling selections.
“A rally based solely on the fact that everything’s going wrong is a rally that cannot and will not stand. It has no staying power, unless something actually goes right,” the “Mad Money” host mentioned.
“So far, nothing’s gone right, so stop pretending otherwise and just get used to” the turbulent market setting, he added. “Because that’s exactly what the market has in mind for you.”
Cramer’s feedback come after the Dow Jones Industrial Average inched up 0.08% on Monday. The S&P dropped 0.39% whereas the Nasdaq Composite decreased 1.2%, closing a unstable day of buying and selling.
Soaring inflation, considerations in regards to the Federal Reserve’s rate of interest hikes and fears of a recession are a few of the financial elements at present roiling the market. Cramer additionally pointed to JetBlue’s hostile takeover bid of Spirit Airlines and the cryptocurrency market’s downturn as examples of headwinds.
“Of course, the market actually goes down thanks to all those negatives. But then, like midday, because of all the hope out there, some of the averages start going higher and then that hope gets the hope machine going again,” Cramer mentioned.
However, traders who commerce on false hope will solely make the market downturn worse, he cautioned.
“I can tell you right now, this kind of wrong-headed thinking has characterized the whole move down: ‘Something to build on.’ … You can’t build on quicksand,” he mentioned.