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This strategy seems 'dumb as wood': Jim Cramer

Paying up for high-growth stocks amid the stock market's ongoing rotation into safer bets has been a "true sin and dumber than wood," CNBC's Jim Cramer said Tuesday.

Speaking on CNBC's "Squawk on the Street" on Tuesday, Cramer said big moves in the markets during the last few trading sessions support his argument against chasing momentum names in the biotech sector, which have been hit hard in recent weeks along with social media and other technology stocks.

Cramer said investors who end up buying a stock such as Gilead Sciences, a biotech firm about 19 percent off from its highs from February, can easily find themselves looking like "suckers." Bio-tech stocks have disappointed recently in intraday trading, Cramer said, and investors should remain wary of chasing them.

Read MoreFund managers unfazed by tech rout: BofA survey

"You go in and you buy these biotechs up like they are now and every time that's happened—maybe today is different—every time you go in and buy Gilead up a buck, there's a guy who comes in and slams Gilead... at the close and you look like a moron," Cramer said. "You ought to stop doing that."

Cramer also said he saw disconcerting moves in the market an hour before close during the past few trading sessions, focused in the biotech and software sectors. He went so far as to call Monday's market action "rigged" by short-sellers and high-frequency traders running ahead of the market.

"I thought it was a Michael Lewis day," Cramer said, referencing the financial journalist who claims high-frequency traders have made the stock market unfair for regular investors. "I thought it was rigged yesterday."

Disclosure: Cramer's charitable trust does not own shares of Gilead.

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