A market with no memory or conviction

The sudden swings and lurches aren't in synch with the data in any way.

By Jim Cramer Feb 27, 2013 10:11AM

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It's not rigged, it only seems that way. I'm talking about that now-ridiculous 150-point decline in the last hour on Monday on worries about Italy, or the big swoon last week over the month-old Fed minutes.

Neither seems to make much sense to me now. The Fed minutes were simply moldy with age, and when we heard from Fed chief Ben Bernanke on Tuesday, it was very clear that nothing had changed whatsoever about his plans to keep buying bonds as necessary. All that sturm und drang and those point-losses for nothing.

How about the last hour on Monday? Sure, there had to be worries about what the Bernanke would say. And there had to be concern and angst about whether Home Depot (HD) could do better than Lowe's (LOW). But let's face it, on Tuesday people figured, "I better sell now, because Italy will be down big tomorrow, and we will open low and get killed."

Did that happen?

Image: Arrow Down (© Photodisc/SuperStock)Well, the first part sure did. Italy was down almost 5%. But the second part? We went up 90, got hit and then soared past that. The whole worry turned out to be chimerical.

After a while, we have to ask ourselves: What gives here? What are people doing? What's the point of selling down 150 in the last hour?

Again, with mixed signals you can look at the data all sorts of ways. You can say, "Well, with Italy on top of sequestration and blah blah blah, we should be down."

But the sudden swings and lurches simply aren't in synch with the data in any way whatsoever.

Unfortunately, we're in a new pattern here. We're now in a world again where there's no conviction, and everything is one-off or there's no memory, as Doug Kass said earlier Tuesday. The only stocks that seem immune to it are Clorox (CLX), Hershey (HSY), Colgate-Palmolive (CL) and maybe Procter & Gamble (PG).
All that said, though, if the market has no memory, you have to have one for yourself. Monday, for example, we caught a prescient upgrade for Cummins (CMI). The stock opened up a couple and then proceeded to give up the ghost into the futures-driven sell-off.

Tuesday, the stock rallied back to where it was before the sell-off, because nothing had changed.

You simply had to remember what the market forgot. I think going forward, it's going to be like that market. You need to remember the cards while the market keeps shuffling the deck.



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 and is long HD and PG.



More from TheStreet.com
Feb 27, 2013 1:27PM
By the way cramer ....congratulations on your business the street dot com losing 13 million last year ......

that kind of performance really qualifies you to critique other business' for mismanagement !
Feb 27, 2013 11:48AM
no problem!  the next 401K set of deposits is coming up in a day or two. 
Feb 27, 2013 2:55PM

Bernanke always ...i repeat ALWAYS says the exact same thing. 

He is going to continue with his zero percent policy and huge amounts of fiat printing money.

If Bernanke and Greenspan were weathermen....their past experience would have been predicting snow in July and balmy days in January and February.  And Wall Street would have still hung onto every word they said, nobody how wrong and dangerous 




Feb 27, 2013 1:07PM
cramer makes money selling advice ...he clearly does not make money trading stocks.
Feb 27, 2013 3:16PM
By the way you stated that your newsletter was going to give $3 mlliion to charity last year from your "charitable trust" as you had not given anything for years ....but mysteriously there is NO MENTION of a donation in your 10K Annual report! 

What gives - were you not being honest with us ?????
Feb 27, 2013 4:29PM

I read yesterday that Bernanke testified to congress that he must keep buying $85 billion in bonds each month (really printing $85 billion) to keep the stock market from declining, finally publicly admitting to propping up stock and housing prices. The decadence and disgust of this blatant public announcement of his corruption is only surpassed by our passive acceptance of it.

Feb 27, 2013 11:39AM
We are seeing TWO CONSECUTIVE DAYS of control and manipulation without valid substantiation. Think your future very carefully today, Wall Street. America is watching closely. We do not like what you do. We know what you don't do.
Feb 27, 2013 5:19PM
It´s all about the Fed money printing, other factors are overruled. 
Feb 27, 2013 4:41PM

How long can this stock market and government bobble continue? The government is the creator of this bubble (president, congress and fed). When it crashes America is going to be in a world of hurt!!!

I believe that before we ever solve our economic problems and restart America were going to have to go threw this crash.

Feb 27, 2013 5:53PM

85 Billion a month buying bonds with printed money? Who's Bonds? The US Governments? For what? Budget shortfall? Expense shortfall? Are they still handing off to Banks that are still taking high risks with the money of whoever's invested with them? Chase just laid off 19,000. Jamie Dimon got a 10 Million Dollar Bonus!


Smells a little Fishy? Whatever!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Keep shopping!!!!!!!!!!!!!!!!!

Feb 27, 2013 2:58PM
Feb 27, 2013 3:05PM
You talk like this is something new when it's not. It's been around since the dawn of the markets, and is only exasperated by 24.7 almost instantaneous worldwide media reporting. Nothing to do with memory. These are the daily swings in the market that have always been.  The quicker the information distribution gets, the more quickly humans react out of the stimulus/response mechanisms of fear and greed. Fear and greed. I am totally perplexed why someone in your profession could possibly find this as new. Reactions are as quick as the reporting, and the reporting these days is, quick. You are definitely just getting old. Not the 1st time I found you out of touch with technology's affect on the markets and commented about it.
Milli second by milli second of computerized trading.   Put trades in the hands of people again  and you will see the market mellow out.
Feb 27, 2013 6:33PM

Once again, Cramer grasps his crystal ball, gazes deeply into and...states the obvious. Let me be the first to say, "Thank you, King of Most Apparent'. 


I think anyone who has even half a clue about the markets knows that they're not 'in synch with the data'.

Feb 27, 2013 6:24PM

BTW....Kramer is published or writes Articles for several other Financial sites..


Just in case some of you want to go and harrass him there also ??


Poor Jim....Just stick that chin out, Buddy...Or Bobo as the Drunkin' Punkin' calls out...

Feb 27, 2013 7:26PM
107 million shares traded hands on the Dow today - absolutely pathetic.  The Dow surges 1.26% and just a handful of "investors" are actually buying and selling.  This "surge" should look very suspicious to anyone paying attention.  But no worries, March is just a couple days away and Bernanke will bestow upon us another $85 billion.

Party on, Wayne.
Party on, Garth.
Feb 27, 2013 6:20PM

Well I would say it was a pretty good Market day, WITHOUT explaining why.....Others can.


Think I would rather read about the "3 biggest asteroid strikes ever..."


Believe I know about a couple, wonder what the third was/where??

Maybe I can learn something?.....This is kind of a dry hole...

Feb 27, 2013 5:08PM

Awesome...were saved again...so Fat Cat or ABS should I tap juniors college fund or my next 6 mortgage payments to 'get in on it'?


Please advise.

Feb 27, 2013 4:53PM
Feb 27, 2013 4:40PM
It's been like this for the past couple of years Mr. Cramer not just the past few days.  Do you monitor the markets or just provide silly comments? People are spooked and any news good or bad drives it up or down. Quit with the paranoid and schizophrenic comments as that does not help either. Don't speculate in your articles, just provide facts and data.
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