Jim Cramer on “Mad Money”.
Scott Mlyn | CNBC
CNBC’s Jim Cramer said Tuesday that the stock market will not bottom until sentiment hits bottom, similar to how stocks rebounded from the historic coronavirus slump last year.
“A year ago we had reached a strange low point when the market saw a change of guard and the Covid winners took over the new management positions,” said the host of “Mad Money”.
Exactly a year ago stocks sold at an unprecedented pace, causing the benchmark S&P 500 index to fall 35% from its February high in just a few weeks.
A year later, the S&P 500 rebounded 82% from its lowest level on March 23, 2020. However, according to Cramer, the sentiment has changed as many of the pandemic’s biggest winners have lagged behind the market year.
“Now we’re being affected by a similar change in leadership and while I know we’ll hit the bottom at some point, it may be a while before we get a crescendo this time as well,” he said.
The key averages all fell about 1% in Tuesday’s meeting.
The Nasdaq Composite is down 6.7% from its February high as stocks in the index pull back as it reopens. The Dow Jones Industrial Average is 2.4% below its March high, while the S&P 500 is within 2% of its all-time high.
Cramer compared a “crescendo” moment in the market with the stock selling peak to “a mismatched synonym and the instruments crash to a nice result”.
He suggested that we should be heading for another, albeit less severely than last year.
“That was when a tsunami of sales wiped out the weak hands and the market bottomed out, except unlike a symphony many of us didn’t realize this was happening,” he said. “We have had a huge run since last year, but now the market is sold out again.”