CNBC’s Jim Cramer advised investors Tuesday to stick to their trading strategies and ignore the often-changing prism of the market after stocks enjoyed a five-day winning streak.
“Please don’t take daily action as a guide because that just tells you you’re using the filter we all use instead of doing your own homework and making your own judgments,” the Mad Money said the host.
“Much of the junk thrown away tonight and tonight could turn out to be the treasure of the market once we get herd immunity,” he said, adding, “We’ll get herd immunity sooner than Wall Street expects we get there. “
The comments come after the major averages all fell from their highs on Monday in the middle of a busy earnings reporting week. The S&P 500 fell nearly 0.5% and the tech-heavy Nasdaq Composite fell more than 1% as concerns about the spread of Covid-19 variants and the potential impact on the economic recovery continued to grow.
The Centers for Disease Control and Prevention on Tuesday advised that the public, whether vaccinated or not, should wear face masks in indoor areas with high transmission rates.
Cramer said the new guidelines helped boost sales of many stocks. United Parcel Service’s shares plunged nearly 7% and Tesla shares fell 1.9%, despite both companies reporting better-than-expected numbers in the second quarter.
“After two tirelessly positive weeks of profit, we have adapted. Great only becomes good, not so bad just becomes bad… let’s just say things are seen as terrible, ”said Cramer.
“You have to keep in mind that this prism could be temporary … but I suspect the market is in debug mode,” he added.
Meanwhile, recession stocks like utilities, drug and food stocks began to rise, Cramer noted.
“The CDC, NIH, and FDA have all created many moments of pain and hysteria that the market could normally shake,” said Cramer. “This time around, however, the Prism says we’re not going to be able to do this anytime soon, so buy recession-proof stocks that don’t have to worry about the economy like the drugs or the utilities.”