CNBC’s Jim Kramer told investors on Monday that their short-term rallies should not deceive them into making optimistic trading decisions.
“A rally is based solely on the fact that everything is going wrong. It is a rally that cannot and will not stand. It has no power of permanence unless something is actually right,” said the host, “Mad Money.”
“So far, nothing has changed, so stop pretending and get used to the volatile market environment,” he added. “Because the market thinks it’s just for you.”
Kramer’s comments came after the Dow Jones Industrial Average rose 0.08% on Monday. S&P fell 0.39% while Nasdaq Composite fell 1.2%, closing trading on a turbulent day.
Rising inflation, concerns over the Federal Reserve’s interest rate hike, and fears of a recession are some of the economic factors that are currently sweeping the market. Kramer cited the adverse takeover bid of JetBlue’s Spirit Airlines and the downturn in the cryptocurrency market as examples of headwinds.
“Of course, the market is really thankful for all that negativity. But then, like noon, because of all the hopes there, some averages start to get higher and then that hope starts the instrument of hope again,” Kramer said. .
However, he warned that investors who trade in false hopes will only make the market worse.
“I can tell you right now, this kind of mis-thinking has marked the whole step down: ‘Something to build.’ … You can’t create QuickSand, “he said.