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Jim Cramer thinks the stock market is playing a dangerous game.
Every day the market plays rock, paper, scissors. It goes on endlessly until the close, and then starts right back up at the end of the day.
The scissors are the Federal Reserve, and the rock is oil. Oil can smash anything that the Fed throws at it. That means Janet Yellen tell Congress as much as she wants about the need to raise interest rates, but oil is the powerful force that can crush her impact on the market.
"Oil is that powerful a force, and it has the added advantage of being dumb as a rock because when oil goes higher it is good for the overall market, but particularly for those companies that do poorly in the real world when oil goes higher," the "Mad Money " host said.
What can the Fed scissors do?
Cramer saw that whenever Yellen hints that the Fed will raise rates and tighten, she slices through the paper of stocks in a heartbeat.
"We have to hang on to every single word because the wrong one cuts paper stocks into shreds," Cramer said.
Read more from Mad Money with Jim Cramer
However, Cramer said to not rule out the power of paper stocks. When there are fantastic earnings from individual companies like Facebook or Google, it can smother oil as long as it's not in total free-fall.
But here is the problem with playing such a dangerous game — it's zero-sum. It changes by the hour, and every single element of the game is in play at all times. How exhausting!
"That is why, in reality, it is an infantile game that proves only one thing: if you play long enough, you are going to lose," Cramer said. (Tweet This)
In a good stock market, a rock, paper or scissors cannot trump anything. They either work together as the market goes higher, or they cancel each other out and nothing happens.
But in a bad market like the one on Wednesday, all objects are in motion. And the only loser to the game is investor portfolios.