Stop Trading!: Don't Stress Friday's Decline
“This has been one of the greatest rallies in history,” Cramer said during Friday’s Stop Trading!, so a pause was inevitable. In fact, investors should see the market’s pullback as a good sign. It means this is a bull, and not a bear, market rally.
Momentum in the banks, which has led the market higher over the past week, slowed after the sector's CEOs met with President Obama. A number of firms seemed ready to pay back funds borrowed from the Troubled Assets Relief Program, but the White House apparently has asked them to hold off. Wall Street had expected these banks to use their newfound freedom to take a significant amount of market share. Now that will have to wait.
Both Bank of America’s Kenneth Lewis and JPMorgan Chase’s Jamie Dimon said their companies’ March performance fell short of that of January and February. Cramer attributed the decline to those banks being short the first two months of the year and having to reverse direction when the market turned up. He’s still bullish on the return of investment banking, bond issuance, mergers and acquisitions and other positive signs of the sector’s strength.
Cramer also pointed to a slowdown in the natural gas stocks. This cohort, including Anadarko Petroleum, Devon Energy and Apache, has led the market much like the banks, despite the commodity trading at just $3.63 per thousand cubic feet.
“They all need to take a big pause,” Cramer said.
Lastly, KB Homes' strong quarter most likely means the other homebuilders are doing better, too. Cramer’s bullish on KBH, DR Horton and Pulte Homes.
Cramer's charitable trust owns JPMorgan Chase.
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