Cramer: NYSE showed system strength, not weakness

Cramer's advice after the NYSE trading debacle
Cramer's advice after the NYSE trading debacle   

After the New York Stock Exchange was halted for trading due to a technical glitch Wednesday, Jim Cramer clarified to investors that there are two kinds of trading halts.

First is the kind that is caused by a computer malfunction. The other kind is caused by the government stopping trading due to yucky stocks.

"You want to be in the one that has the computer crash, the New York Stock Exchange, not the one that had the stock market crash, namely the indices that trade in China," the "Mad Money" host said.

Cramer saw two absolutely amazing marvels Wednesday. The first was that the NYSE went down, and nothing really happened. Investors didn't blink, and trading was rerouted to other exchanges. The market ended up being just as bad on the other exchanges as it would have been on the NYSE.

"I can remember a time when the New York Stock Exchange was the only game in town, and this outage would have caused widespread panic and a huge across-the-board decline," Cramer said.

It may seem counterintuitive, but in Cramer's perspective what happened Wednesday was a testament to the strength of the stock market—not the weakness. (Tweet This)





Traders work on the floor of the New York Stock Exchange.
Lucas Jackson | Reuters
Traders work on the floor of the New York Stock Exchange.

The power of competition was the most evident change that Cramer saw, as he can remember the days when the exchange was a monopoly.

The second marvel was that somehow the U.S. market is now taking its cue from whatever the worst market in the world is doing. It was following Europe for ages, and now it follows China. Cramer believes that the free fall in the U.S. market Wednesday would have been much lower, if there wasn't a halt in the Chinese market as well that impacted 74 percent of their stocks.

And while Cramer does not like to recommend Chinese stocks because he doesn't trust their reporting methods, he does believe that if China's government keeps providing stimulus, the weak-handed sellers get washed out and most of the gains from last year roll back—then maybe China won't fall apart and it will slow.

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However while China has some real issues right now, Cramer still has hope that it has the ability to grow. He compared it to the 1987 crash in the U.S. where the stock market plummeted after a big run, but the economy wasn't hit.

Cramer's advice after the NYSE trading debacle?

"Find the stock of a great American company you like. Let the halts in New York and China, different as they may be, give you a better price than you'd normally get, and pull the trigger," he said.

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