Even though the averages haven't done that badly lately, Jim Cramer wants to know why the market still feels so bad these days. Should investors take a negative standpoint on stocks right now?
Cramer attributed some of the negative sentiment first to those who look at stocks only through the prism of what could happen with the Federal Reserve. Every day someone is guessing what the Fed will do, and with the meeting around the corner, it has monopolized many peoples' minds.
But the stock market has been rough because anyone who follows individual sectors knows that things aren't so hot right now, and that is producing confusion. How could a cooling economy produce more jobs?
"I think the answer is simple — jobs are in the rearview mirror. The businesses I'm looking at now will be laying off more people than they are hiring at this place in the not too distant future," the "Mad Money" host said. (Tweet This)
That is why everyone is focused on what the Fed will say. Investors want to see if the Fed is aware of the weakness in the economy and if it knows that employment is a lagging indicator. It won't stop a rate hike from happening, but at least it could delay another one from happening immediately.
If the Fed members say they are aware of the weakness and employment lag, then Cramer expects to see a Christmas relief rally beginning Wednesday afternoon.
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The next reason why Cramer thinks the market is so disappointing is the sheer number of stocks going up. He read an article written by James Rev Shark Deporre, who found that the market is extremely narrow, with the Top 10 stocks in the up on average of 20 percent. The remaining 400 stocks are down an average of 3 percent.
"I don't want to be that negative. Why not? Because if the Fed gives the right statement, then this market most likely will behave like a coiled spring, and there will be tremendous regret if you decide to dump the winners in advance of a benign admonition come Wednesday afternoon," Cramer said.
A string of deals made Cramer less negative about the market environment, including Dow and DuPont, Jarden and Newell Rubbermaid, and Marriott and Starwood. It seems that the market has declared these as total stinkers, but Cramer thinks these mergers could ultimately yield higher prices.
Balanced against the combined forces of some stocks doing really well and managements that are motivated to have their share prices higher is the gravitational pull of a negative news flow that brings most of the stock market down. Cramer fears that it could mean that when the market does rally, it won't be able to sustain its momentum.
Ultimately, this market feels bad because many of the companies in it aren't doing that well, and the few that are in good shape seem to be unsustainably high.
"If you aren't at least a tad cautious in this environment, then I think you are being arrogant or clueless or both," Cramer said. (Tweet This)