Cramer says the market won't bottom until it sees another 'crescendo' moment

CNBC’s Jim Cramer on Tuesday said the stock market won’t reach a bottom until sentiment finds a low point, akin to how stocks rebounded from the historic coronavirus-fueled plunge last year.

 “A year ago, we caught a weird bottom as the market experienced a changing of the guard, with the Covid winners taking over as the new leaders,” the “Mad Money” host said.

Exactly one year ago, stocks sold off at an unprecedented pace, pulling the benchmark S&P 500 index down 35% from its peak in February in a matter of weeks.

One year on, and the S&P 500 has bounced 82% from its lowest point on March 23, 2020. But sentiment has shifted, Cramer said, with many of the pandemic’s biggest gainers lagging the market year to date.

“Now we’re being dragged down by a similar leadership change, and while I know we’ll bottom eventually, it might take a while before we get a crescendo this time, too,” he said.

The major averages all pulled back about 1% in Tuesday’s session.

The Nasdaq Composite is down 6.7% from its February highs as stocks on the index pull back amid the reopening trade. The Dow Jones Industrial Average is 2.4% off its March highs, while the S&P 500 is within 2% of its all-time highs.

Cramer likened a market “crescendo” moment, when stock selling reaches a climax, to “a discordant synonym, and the instruments crash to a beautiful conclusion.”

He suggested we’re headed for another, though less severe than last year’s meltdown.

“That’s when a tsunami of selling wiped out the weak hands and the market bottomed, except unlike a symphony, many of us didn’t realize it was happening,” he said. “Since last year, we’ve had a huge run, but now the market’s selling off again.”