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Cramer: Lurking catalyst could slay the bull

Jim Cramer is an optimist and he believes in the bull. However, he thinks there is something lurking in the market that could stop it in its tracks.

"Supply kills," said Cramer

By supply, the "Mad Money" host is referring to the sharp increase in shares available for purchase due to a sizable number of IPOs. It's a particular problem when companies come public that aren't profitable and don't show any clear path to profitability in the years ahead.

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In those cases, Cramer says valuations are often unsustainable. In turn, the selling can bleed into other parts of the market and ultimately trigger a downward spiral that ends in disaster.

"That's the real bull slayer," Cramer said.

Although Cramer had noted the issue before, because the IPO market had slowed in recent weeks, it seemed as if concerns were no longer warranted.

However, it may be time to again throw a flag on the play, again.

"We are, again, seeing a return of IPOs to a level of supply that is making me uncomfortable," Cramer said. "On Thursday we had five IPOs, that's way too many for me, and only two made money. The other three truly stunk up the joint."

Looking forward, Cramer sees more of the same. "There's a huge slate of deals coming next week. And I'm hearing talk of reviving the big deals that were shelved earlier in the year."

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All told, Cramer is cautious.

"We haven't seen big secondaries yet, but that could be next. All I can say is that supply, above all else, is worth watching closely. Supply is a bull slayer."

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