TBEN’s Jim Cramer warned investors on Wednesday that stocks could continue to fall — at least for the foreseeable future.
“I think we have a period of consolidation as we get rid of the weak-handed investors. And we certainly wash out those who get carried away and commit personal mistakes, like buying bitcoin above $20,000 or messing around in meme stocks,” he said.
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Shares tumbled on Wednesday after retail sales data in December increased recession fears and investors took profits on gains made earlier in the month. The S&P 500 closed at its lowest level since December 15 and the Nasdaq Composite fell, breaking a seven-day profit streak.
“Right now, the market is working into one of the most overbought situations we’ve had in ages. In the past two weeks, we’ve just gone too far and too fast. It’s not like everything is terrible,” said Cramer.
He pointed out that while Microsoft said it is laying off 10,000 workers, other industries have remained much more resilient. Many companies, eg United Airlines recently reported great quarters so far this earnings season, he added.
“Large parts of the economy are holding up just fine. The problem is with the technology, as I’ve been telling you for months,” he said.
That won’t stop the market from hurting more, though, at least in the short term, Cramer warned. “The bears – they will be at full strength tomorrow.”