As market churns, time is your friend
Some analysts are saying this is a buying opportunity, but it might be better to watch and wait.
Look, if it were just U.S. interest rates that were going up and nothing else, I would say: "You know what? Let's see what looks good in the fallout and do some buying." But it is so much more than that. So much more is going wrong.
China injected banking reserves last night, or else U.S. stocks would be down hideously again. But no one really has a clue about what's going on in China, and higher rates here cannot be good for fund flows there under any circumstances.
Europe is just bad, yet it's stable. But will it remain stable? After all, some of the interest rates in the peripheral countries are creeping up, and we are headed into the traditionally slow summer.
Brazil is horrendous. Anything you touch down there -- and I have attempted to touch it -- is disastrous. I actually believe it's getting worse, as the country is spending fortunes building stadiums and the like while the people revolt. India has inflation and slow growth. Japan is made up -- just made up -- and is a huge part of the problem, because it wants a currency war at the wrong time and the wrong place.
There are whole emerging markets in which currencies have been paying better rates for money than the U.S. has. They are experiencing outflows that are, at least to their countries, frightening in the way this was in 1996 and 1997.
In that environment I am supposed to step into the breach and buy a homebuilding stock -- all while mortgage rates could go up 25% in the next few weeks? In this environment I am supposed to buy the stock of a company with low growth, and yield that is less than that of the 30-year U.S. Treasury, that needs a weak dollar in order to beat the numbers?
In this environment I am supposed to trust Fed chief Ben Bernanke over the bond market? The latter telling me to forget about Bernanke at the same time that President Barack Obama seems to be saying the same thing in, frankly, a very rude sort of way.
In this environment I am supposed to go and buy stocks that every chartist in the book tells me are totally broken, even as the market isn't yet oversold? On top of that, we are heading into the holidays, when there is a dearth of information.
Here are the two weapons I want to deploy against this market. First, I want time -- time to see how things shake out. Why do I have to decide today that this is the place and the moment to make a stand? Why? 'Cause I woke up and the futures were up because of Chinese reserves? This bounce could last 10 days, or it could last five days, or it could last 10 hours or until 2 p.m. ET, for all I know.
Second, price is my friend. Last night, as I went over the charts, with the help of my colleague and fellow writer Matt Horween, I found a bunch of health care real estate investment trusts and some office and retail REITs trading at last above 5%. That's intriguing. It's a good place to start. But that's all it is -- a good place to start. I saw many other charts of stocks that seemed to be hanging around waiting for news, but news of what? Nothing I know.
So I would just as soon be a seller as a buyer. That's not encouraging.
The only big thing this market has going for it is that it is down 5% from the highs. That's not insignificant, but it is certainly nothing that says, "OK, I have to go buy the market," especially when I am looking for the edge with individual stocks.
So I wait. I have patience. I want my prices. Not their prices. May not get them. In a rising-interest-rate environment, that's OK. I don't need them. At least not yet.
C'est la vie.
Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust.
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One of my favorite sayings is
"Don't pick a fight with an old man. If he's too old to fight, he'll just shoot you."
In this environment I am supposed to trust Fed chief Ben Bernanke over the bond market?
Jimmy, my mommy said never ever trust anybody or anything. You got to do your homework and see which stocks are being lumped together with all the others and will not be hurt or might even benefit from raising interest rates. If the economy does continue to recover, Uncle Ben may have trumped that issue, then large caps with good stories and little or no debt are good at reduced prices. Also funds that make their living off of adverse and inverse market and rate movements. I'll bet Buffet's buying.
Have you been to Vegas since the Imperial Palace remodel? It's now The Quad. Not sure where that name came from. It looks pretty hip from the outside. They kept the Dealertainers and the car collection. They haven't remodeled the rooms yet, so they are still the old Imperial Palace furniture. It is also the loudest casino in the world. The sound system is so loud with the music you can't hear yourself think. They definitely have a one-sided marketing strategy because everyone in the casion and everyone staying at the hotel is colored.
You people just don't care. Paula Deen is too tired to appear on TV and all you can talk about is money.
Conoco below $60.00 a share. Yow!
Anyway, take comfort in the fact that whatever is wrong is somebody else's fault.
Is there ever a time to sell?? I remember some years back, you forgot to sell and you got stung big time!! So now it's time sit back and watch?
It's always a good time to ignore the pundits!
Maybe interest rates are headed up. A new CD showed up for purchase on Schwab last night. Wells Fargo Bank. 3.5% per year. I haven't see CDs that high in a long time.
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