Tags: jim | cramer | stocks

Cramer: Traders Forming Bull Market

By Gene J. Koprowski   |   Tuesday, 25 Nov 2008 09:08 AM

The volatility in the stock market these days is unprecedented, and Wall Street guru Jim Cramer says two thoughts dominate trading today.

"One of them is the technicals," Cramer tells theStreet.com. "Every time we get to (Dow) 8,200, it becomes a bull market. We rally 600 or 800 points. Then it becomes a bear market and goes down 10 percent. Then it becomes a bull market."

The second "thought" that some money managers have is to play the futures market, rather than underlying stocks.

Turbulence makes it difficult to quantify the market, yet traders have decided that it is "time to buy."

"I would urge you to realize — they're right," Cramer says.

As for individual stocks, Cramer has no favorites right now, which he considers unusual, since he thinks of himself as a stock guy.

The reason for that is that there are a lot of active futures traders influencing stock prices dramatically.

"The futures guys are totally in charge," Cramer says. "Oil is down big. So Chevron and Exxon are up. That's futures. If you trade the underlying stock, you are out of luck."

Much of the action, too, is coming from hedge funds, rather than large, institutional investors.

"Big institutions cannot move that fast," Cramer says.

Other economic experts see the volatility stemming from uncertainty over the long-term impact of 1930s-style government economic policies embraced by Congress and vociferously advocated by President-elect Barack Obama.

"The new congressional Keynesians believe government can spend us into prosperity,” writes economist Larry Kudlow.

“They’re wrong. Everything we have learned in the last four decades tells us that governments don’t create permanent new jobs or capital investment. In fact, the more we spend, the more we’ll have to raise tax rates. And that depresses growth."

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The volatility in the stock market these days is unprecedented, and Wall Street guru Jim Cramer says two thoughts dominate trading today. "One of them is the technicals," Cramer tells theStreet.com. "Every time we get to (Dow) 8,200, it becomes a bull market. We rally 600...
jim,cramer,stocks
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2008-08-25
 

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