Don’t believe in this rally. You can’t. The whole thing was just short covering. Plus, company earnings are terrible right now. And the Federal Reserve’s attempts to save us? They’ll fall short. Besides, you can’t trust any market move until housing bottoms. Better to wait for stocks to pullback a bit before buying in.
That’s the nonsense that doomsayers are trumpeting these days, Cramer said Friday. What these people don’t realize is that short covering always starts a rally because the shorts were the investors smart enough to ride the market all the way down. Now, they’re switching strategies to capitalize on the turn in stocks.