Here are the things that must happen in the market to get me buying stocks in earnest again

Published Tue, Sep 13 20229:06 PM EDTUpdated Wed, Sep 14 20228:54 AM EDT

People do not want to hear anything positive. It's almost as if they think that positive equals stupid. Yet, I'm not arguing we should be buying here. I'm simply saying you should get ready to do so, because there's a rapidly growing consensus that we will now get a 100-basis-point interest rate hike by the Federal Reserve at its September meeting next week. The stock market Tuesday got crushed on that notion. You really can't have that kind of disparity if you are a bull because it means that if the Fed only goes 75 basis points then it's viewed as weak — yet 100 is the sign that things have gotten completely out of control and there's little hope that we will get immediate relief. Or to put it another way, once you get 100 basis points anything less than that is going to be a sign of Fed cowardice. Not to mention, the Fed has already been hiking rates since March, with back-to-back meetings of 75-basis-point increases. That's why we only bought 50 shares of Honeywell International (HON) in Tuesday's market plunge, an agreement I made with Jeff Marks , the Club's portfolio director, if it got back down to where it was. I know that when you have 100 basis points you're going to have a lot of people who will say that there's simply no reason to own stocks at all. Why not just wait until the Fed is done and sit in bonds, which increasingly have seen their yields skyrocket. In fact, on Tuesday, shortly after a hotter-than-expected consumer price index for August came out, the 2-year Treasury yield hit 3.794%. That's a high back to 2007 and a move that slammed stocks. Again, I have nothing against that view for the moment because I require certain preconditions before we put 1% or 2% of our cash position to work. The market has to be oversold and it is no secret that we could absorb such a blow Tuesday because we are barely oversold, coming in at minus 2.43 on the S & P Oscillator , and ending at minus 3.49. After this run, I need to see something south of minus 5 to pique my interest. Plus, I know that the CPI plays a much bigger role than it has in a long time because of our so-called runaway inflation. But here's something you may not know. I subscribe or read a huge number of publications. Only one of them is bullish and that's always bullish so I don't want to read too much into it. The rest are all about bear markets and what distinguishes this one from others — NOTHING. Now I know there is nothing wrong with being part of the consensus for the moment. I didn't like the consumer inflation number at all. I also know that the declines in pricing aren't yet flowing through. We got part two of the inflation picture Wednesday morning. The producer price index for August was largely as expected , but that brought little relief to stocks. However, let me give you a thought that stuck with me all day. CNBC has a very thoughtful real estate reporter, Diana Olick , and she did this amazing report Tuesday morning about how rents are finally coming down. Do you know I referred to this report a number of times during the trading session and I might as well as said, "Hey, how's the weather." It was meaningless to people. I have learned a long time ago that you don't want to overlook reports signaling that the single most intractable part of non-wage inflation is rent, because rents have gone unchecked. Then I have been discussing with multiple CEOs behind the scenes if the great job-hop is continuing. Sure enough, it's still prevalent with younger people who have grown up in this brave new era. However, that's no longer the case with Gen X or Millennials though. They're back and they don't want to leave their jobs. There might not be one for them if they do. I know better than to look through any number. I'm not knocking the preparation of the CPI data. If it had been a good reading, I would have praised it. It wasn't. But from what execs tell me, with the exception of those in travel — still a Covid catch-up story — consumers are getting scared. A scared consumer, even a flush scared consumer is not going start spending. It's easiest, right at this moment, to say "nothing is working, the Fed has blown it, let's just take our medicine, earn around 4% with bond yields and go home. I totally get that. But I keep thinking: What happens if the Russians lose in Ukraine and go home? What happens if the data starts getting softer and the Fed does 100? What happens if the strong dollar actually levels off? Nonetheless, for now, it's not a question of whether companies are going preannounce weaker quarters, but rather when more companies will. I expect imminent preannouncements. As I prepare for our Club "Monthly Meeting" at noon ET on Thursday , I am looking at stocks like Alphabet (GOOGL) and Qualcomm (QCOM) and thinking: I don't know when they are going to stop going down. My desire is to buy some and then buy more lower. Again, though, not until we are oversold and not until stocks take out their lows. Without both, not just one, but both, I can't be as tempted as I would normally be because there's no really important numbers coming out and I don't like the debate around a 75-basis-point Fed hike or a 100. Give me an oversold market, a few positive data points, no real big preannouncements, and I will, on Thursday explain why it might be time to put some money to work. (Jim Cramer's Charitable Trust is long HON, GOOGL and QCOM. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Jim Cramer on Squawk on the Street, June 30, 2022.

Virginia Sherwood | CNBC