CNBC’s Jim Cramer said Tuesday he was staying cautious on stocks, but stressed he’s not giving up on the bull market.
“I’m not a bear. I’m neutral for the moment. I’m just waiting to have something to hang my hat on before I pull the trigger,” the “Mad Money” host said.
“Lots of unseasoned players in this market keep mistaking my caution for a belief that the whole market’s headed down. I simply want to lessen the chances that the stock market gets hammered” after buying a stock, Cramer said.
Big picture, Cramer said his hesitancy stems partly from the fact he’s not sure whether three major overhangs — rising inflation, the coronavirus delta variant and a change to Federal Reserve policy — have really been resolved in the near term.
“Is [the Fed] really on hold?” Cramer asked rhetorically. “I thought they were on hold because of worries about the delta variant. If Covid peaks, there’s a chance they could start talking about tightening again, even as I know [Chairman] Jay Powell would prefer not to. Unfortunately, the data might make that difficult, unless inflation really has peaked, in which case the Fed’s no longer a problem.”
“Here’s the issue: I’ve got no conviction about any of those scenarios. They’re possible,” Cramer acknowledged. However, Cramer said he has “no idea” whether they’re probable, which factors into his cautious view this month.
September is a historically tough month for stocks, a fact Cramer has pointed out consistently in recent days as the market has struggled. The Dow Jones Industrial Average is down 2.2% this month, while the broad S&P 500 and tech-heavy Nasdaq Composite have slid more than 1%.
As for when it may finally be time to buy, Cramer said he’ll be looking for moments when a stock does not decline on bad news and still does not fall the next day when that same bad news is highlighted by equity analysts.
“That does tell you the pain is over,” he said. However, we may have to wait until the second week of October, when the period of maximum seasonal pain … is done,” Cramer added. “Finally, let’s just say, we need stocks to stop suffering big declines on nothing.”