- CNBC’s Jim Cramer on Monday warned investors that selling tech stocks in thin trading during the early morning premarket hours is not a sound strategy.
- “The selling that goes on between 4 a.m. and 4:30 a.m. in these Nasdaq names is frightening,” Cramer said.
- “To trade off of the tape is a real mistake here. It could reverse in a nanosecond,” he added.
CNBC’s Jim Cramer on Monday warned investors that selling stocks in thin trading during the early morning premarket hours is not a sound strategy.
“The selling that goes on between 4 a.m. and 4:30 a.m. in these Nasdaq names is frightening.” Cramer said on “Squawk on the Street.” “I keep thinking it’s a machine or an idiot, because who wants to sell without any real buyers there.”
Futures tied to the Nasdaq, which declined 2.6% last week, did not participate in Monday’s rebound that pushed many non-tech stocks higher before regular trading hours began on Wall Street at 9:30 a.m. ET. After the open, the Nasdaq rose, but lagged the strong recoveries in Dow Jones Industrial Average and S&P 500.
The Nasdaq, as of Friday, was about 6% away from its latest record close on Nov. 19. The Dow was roughly 5% away from its Nov. 8 record close. The S&P 500 was nearly 3.7% away from its Nov. 18 record close.
Cramer said many big tech stocks, which heavily populate the Nasdaq are in a bear market, defined as being off 20% or more from recent highs.
“To trade off of the tape is a real mistake here. It could reverse in a nanosecond,” Cramer said earlier on CNBC’s “Squawk Box,” pointing out that Nasdaq selling could turn into buying in this fickle market environment.
Cramer has never shied away from criticizing “pajama traders” as he calls them. In a couple of examples, the “Mad Money” host blasted them in 2017 and in 2019.
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Source: Investing - cnbc.com
