- CNBC's Jim Cramer said Monday that there are a number of risks contributing to a "tough" stock market.
- However, the "Mad Money" host said investors "can start looking for buying opportunities on the way down."
- "But we have to buy stocks gradually on the way down, because if you just jump in on every dip, well, then you're going to get slaughtered," he added.
CNBC's Jim Cramer said Monday he believes investors can begin to search for beaten-up stocks to buy after a tough stretch for Wall Street. But he stressed the need for discipline.
"Right now, there remains plenty of risk, although with the Nasdaq bruised and the overall market down 5% from the highs, I'm not trying to tell you, 'Oh, here comes the sell-off,'" the "Mad Money" host said after all three major U.S. equity indexes finished in the red. "We can start looking for buying opportunities on the way down."
"But we have to buy stocks gradually on the way down," Cramer added, "because if you just jump in on every dip, well, then you're going to get slaughtered."
The S&P 500 fell 1.3% on Monday to finish at 4,300.46, its lowest close since July, while the tech-heavy Nasdaq Composite dropped 2.1% and is now down 4.7% in its past five sessions. The blue-chip Dow Jones Industrial Average on Monday declined 323.54 points, or 0.94%.
Despite certain stocks getting to attractive levels, Cramer said, he warned that it remains a "tough" market. Investors are no longer conditioned to simply buy every dip after Wall Street's robust rally from March 2020 lows, and the high price of oil is creating inflationary worries, he said.
There's also been "tremendous" profit-taking in technology stocks, which is weighing on the market overall, Cramer said, and continued uncertainty around policy out of Washington and aggression from Beijing.
"Against all of these is Merck's Covid pill. ... It's a good start," Cramer said, referring to the company's oral antiviral treatment, developed with Ridgeback Biotherapeutics. The drugmakers say it reduces the risk of hospitalization or death by roughly half for patients with mild or moderate Covid cases.
"Getting Covid under control is incredibly important, even for inflation. I think as stocks come down, we could be due for an oversold bounce," Cramer said. "Nothing like lower stock prices to make the market more attractive. Plus, if oil prices ever go down, the averages will explode higher."