Thursday, June 29, 2006
Real Money Blog
Get in Shape for the Post-Fed Pattern
06/29/2006 10:41 AM
In this article, Cramer is displeased with today's bull run, prior to Bernanke's comments on Fed policy.
He exclaims: "We go into the hike with a full head of bullish steam. Then we get the hike and we don't go down a lot or up a lot, because the Fed under Ben Bernanke doesn't play its hand very well. It doesn't play its hand because he either doesn't know what he is doing (the Fed chairman as rookie or amateur, if you want to be more harsh) or because he literally wants to wait on every piece of evidence and doesn't care that commodity prices have weakened since May 11."
Cramer fears investors are getting too "confident" and are ignoring the possibility of future economic data reigniting fears of more interest rate hikes.
He suggests selling some stocks into strength and buy into weakness.
Finally, Cramer reminds his readers that the initial reaction, after the Fed meeting, is not always a good tell of where the market is going longer term.
Also, Cramer warns of bearish technical patterns:
He exclaims: "Keep in mind that you also have chart patterns that looked OK for the short term -- small reverse head-and-shoulders patterns -- that now turn into giant tops. Why does that matter? Because it is summer, because the hedge funds control the action and because the hedge funds don't want the market higher because many of them are underwater."
06/29/2006 10:41 AM
In this article, Cramer is displeased with today's bull run, prior to Bernanke's comments on Fed policy.
He exclaims: "We go into the hike with a full head of bullish steam. Then we get the hike and we don't go down a lot or up a lot, because the Fed under Ben Bernanke doesn't play its hand very well. It doesn't play its hand because he either doesn't know what he is doing (the Fed chairman as rookie or amateur, if you want to be more harsh) or because he literally wants to wait on every piece of evidence and doesn't care that commodity prices have weakened since May 11."
Cramer fears investors are getting too "confident" and are ignoring the possibility of future economic data reigniting fears of more interest rate hikes.
He suggests selling some stocks into strength and buy into weakness.
Finally, Cramer reminds his readers that the initial reaction, after the Fed meeting, is not always a good tell of where the market is going longer term.
Also, Cramer warns of bearish technical patterns:
He exclaims: "Keep in mind that you also have chart patterns that looked OK for the short term -- small reverse head-and-shoulders patterns -- that now turn into giant tops. Why does that matter? Because it is summer, because the hedge funds control the action and because the hedge funds don't want the market higher because many of them are underwater."
