The Dow fell over 200 points on Tuesday on news of Ireland’s financial troubles. Or was it China’s fight against inflation? The strong dollar? Or maybe it was because investors who fear the uncertainty about changing US tax laws decided to take profits? Then again, it could be just a typically big down day that the market often sees during options-expiration week.
“I can foment a million reasons why this is a very serious sell-off,” Cramer said during “Mad Money,” “or I can just say, ‘Hey, you know what? We’re up a lot. The charts got very parabolic. It’s perfectly reasonable we could take a hit here.’”
Cramer admitted that Dow 11,000 is, psychologically, a critical level, but at the same time a loss of this magnitude is more easily absorbed that at other Dow levels.
“It always looks like it’s falling apart when it’s down 200,” Cramer said. “But remember we’re at 11,000. We’re not at 8,000. Two hundred [points] is not that big a deal.”
His recommendation was to use the pullback to buy stocks that had been too expensive beforehand. One group in particular that he mentioned was the coal miners, specifically Peabody Energy .
“I like Peabody,” Cramer said. “It’s dropped a lot.”
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