Jim Cramer was not surprised that averages closed in the red Wednesday, especially considering that the Greece negotiations collapsed, yet again, and Carl Icahn basically said stocks were overheated.
It certainly doesn't take a lot of research to figure out what drove the market down!
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What most interested the "Mad Money" host about Icahn's remarks was that the occasion for his talk was actually celebratory. He was taking a victory lap for his good fortune on his Netflix position.
"I thought Icahn's beef was more with the lack of worth in the high-yield bond market than with equities, especially given that he still owns a ton of stocks," Cramer said.
Cramer did not hear Icahn say that it was time to create short positions on stocks. What he heard him say was more that he was ready to ring the register on stocks like Netflix, because it has had some big moves lately. Yet, he still found value in stocks like Apple, which he said he would buy more on a dip, so it's not like he said to sell everything.
The second negative that brought down the market on Wednesday was Greece. Cramer hated the false confidence that the deal on Tuesday brought to investors. Like, really hated it.
Cramer considers this the kind of torture that won't end until the 13th hour, when it will likely turn out that Greece has enough money after all to make some payments.
"We simply cannot have this darned thing hanging over our heads and still believe we are going to get a big fat non-Greek rally, which is one of the reasons why I didn't want any Fed governors talking about one or two rate hikes until the fat lady sings and Zorba the Greek dances," Cramer added.
The third negative of the day was the downgrade of stocks that Cramer loved. During the most recent rally, the banks have been the strongest leaders out there. Then Deutsche Bank pulled the plug on Goldman Sachs and Citigroup, downgrading them to hold from buy.
Or how about Citigroup's hammering on the cybersecurity stocks? Cramer expected a pullback, but he didn't expect Citigroup to make it happen when it beat down Fortinet and FireEye.
Cramer warned investors not to sell cybersecurity, because the next time a data breach happens, you will wonder why you ever sold them.
The last miserable piece of news on Wednesday was the crash of the transports. Union Pacific and UPS both took a beating and fell through the $100 floor.
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"So, you crush the banks and cybersecurity plays, sending down the two biggest sectors, finance and tech, then you get run over by a freight train and a big brown truck on a day when Greece is back messing up the narrative, and you aren't going to go picking among the red hot rubble until it cools," Cramer said.
Now, what should investors do?
Everything that Cramer heard about the market being overheated made sense to him. He has been saying he doesn't like the market setup for days. It is time to let the story unfold, and wait to see if there is a pullback. Let the weak hands shake out their stocks and see what happens.
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