Cramer Indicator Flashes Bullish for Markets [w/ edit]

Cramer jumps the gun on TeeVee, advises investors (i.e. the public) on 5 stages of grief

[edit] With reference to the last sentence below I did do a cluster of buying across several areas this morning while things were good ‘n bearish. Plenty of dry powder as well. 

Only 1-3 days into the breakdown, depending on what index you’re interested in, Jim Cramer says…

Cramer says investors are in denial about stocks: ‘The sell-off is real’

He’s already advising about the 5 stages of grief and the moment of capitulation to watch for.

Better still, he and CNBC are using the weakness in bonds (strength in long-term yields) as a rationale about why stocks are bearish.

Fixed-income investors, worried about inflation that could come with the U.S. economic recovery, are selling bonds and the activity is bleeding into the stock market. Institutional investors taking their cue from the bond market are swapping tech and growth stocks in their holdings for cyclical and value names, and retail investors can’t afford to ignore it, Cramer said.

Well, they are right that in this environment there is rotation (don’t be surprised however if this correction instigates a temporary rotation back to growth/tech as the main excess very recently has been in the reflation-sensitive stuff), but bond yields have guided the reflating markets higher for nearly a year now. That’s been our (NFTRH) story and we’re sticking to it until given reason not to. The impulsiveness of the spike in yields in late February (as tracked in NFTRH and noted in the Trade Log and updates at the time) was the cautionary note, not the ongoing rise in yields.

The bottom line is that the markets are intact to their major daily chart trends and Cramer’s alarmist views above are getting ahead of the reality. Sure, in a couple weeks the market might have done some things that warrant the tone of the above. But in the short-term, and considering our other indicators in play, the Cramer Indicator is flashing bullish as the man for whom it is named jumps the bearish gun.

Other than a couple of gold stocks yesterday, I have not bought this correction. But ole’ Jimbo makes me at least think about it.

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