Mad Money

Cramer: 3 camps driving market moves

Cramer on 3 different types of investors
Cramer on 3 different types of investors

(Click for video linked to a searchable transcript of this Mad Money segment)

Can't make heads or tails of this market. Cramer understands.

Not only are stocks all over the place but the three major indexes seem to be at odds with one another as well.

Both the S&P 500 and Dow Jones industrial average had their best day in 3 weeks on Wednesday with the Dow shooting up, by triple digits. The , however, couldn't even close at break even. It finished in the red.

What on earth is going on?

Peter Dazeley | The Image Bank | Getty Images

Jim Cramer says there are three powerful camps in the market and each is driving stocks in different fashion. They follow:

Camp #1

Cramer calls this camp, "those who have partied like it's 1999 and now want to leave the party as fast as they can."

Investors in this camp are largely money pros who realized significant returns both last year and early this year by playing momentum stocks. "These managers now fear giving it all back in one of the most vicious selling tsunamis I've ever seen," Cramer said.

Camp #1 is largely behind the decline in the Nasdaq; it's this camp that generates selling pressure in the market on almost a daily basis.

Camp #2

This camp is largely made up of bulls. "It's those who are taking their cue from economic data such as the robust jobs report, the Federal Reserve surveys, industrial production along with automobile, truck and non-residential construction builds," Cramer said.

Investors in this camp are optimistic and are buying cyclical stocks, particularly industrials and so-called big cap rebound names.

Camp #2 is largely behind the advance in the Dow.

Camp #3

In this camp you'll find investors who are seeking relative safety.

"I see two subgroups in this camp. The first sees interest rates going down and thinks that we must be heading toward a recession. They're buyers of defensive stocks such as utilities. Meanwhile, the second group wants income and is also looking for companies that could bring out value," Cramer said.

It's this contingent that's driving food, beverage and consumer packaged goods companies higher, and ultimately the broad market.

Read more from Mad Money with Jim Cramer
Cramer: Heed Apple, Icahn and Twitter
Seeking insights, Cramer revisits Flash Crash
Shouldn't falling yields benefit housing?

All told, Cramer believes these 3 camps will continue to influence the market for some time to come. Therefore, he says get used to somewhat confusing if not contradictory price action in the broad indexes. And while you're at it, buckle up. Looks like it's going to be a bumpy ride.

Call Cramer: 1-800-743-CNBC

Questions for Cramer?

Questions, comments, suggestions for the "Mad Money" website?