Tags: Jim Cramer | stocks | short-term | obstacles

CNBC's Jim Cramer: Stocks Face Many Short-Term Obstacles

By    |   Wednesday, 30 July 2014 11:51 AM

While major stock indices are perched near record highs, there is plenty to worry about in the short term, says Jim Cramer, host of CNBC's Mad Money.

"I am skeptical, especially of the most recent gains. . . . We have to face some facts here," he said on the show.

"First, we are seeing what looks to be the denouement of the housing cycle." New home sales plunged 8.1 percent in June. And the S&P/Case-Shiller home price index for 20 major cities slipped a seasonally-adjusted 0.3 percent in May.

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Problems are surfacing in the aerospace industry too, Cramer said. "Recently I have begun to see downgrades of many stocks connected with the group, and with the exception of Honeywell, every single company that I follow in this sector has not been so hot."

There are signs of oversupply in the auto sector, and falling interest rates make things difficult for banks, Cramer said.

To be sure, he remains bullish on stocks for the long term. "I don't believe that most of these cycles are played out. I simply think they are pausing."

Investor Mark Cook, who was featured in Jack Schwager’s book "Stock Market Wizards," is much more bearish than Cramer. He sees stocks tumbling 20 percent or more within the next year, MarketWatch reports.

Cook uses a measurement that combines the NYSE Tick, which represents the number of NYSE stocks ticking upward minus the number ticking downward, with stock prices. The indicator predicted the 1987, 2000, and 2007 crashes, he says.

Now stock prices are rising, and the NYSE Tick is falling.

"There have been only two instances when the NYSE Tick and stock prices diverged radically, and that was in the first quarter of 2000 and the third quarter of 2007. The third time was April of 2014," Cook told MarketWatch.

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While major stock indices are perched near record highs, there is plenty to worry about in the short term, says Jim Cramer, host of CNBC's Mad Money.
Jim Cramer, stocks, short-term, obstacles
352
2014-51-30
Wednesday, 30 July 2014 11:51 AM
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