The market is confused, Cramer said Tuesday, because we don't know what's good stocks in specific, or for the market in general. Stocks rise and fall on the same information on the same day. Cramer blamed this erratic market action on 10 things the market can't make its mind up about.
First, it's unclear whether the market wants lower oil prices. Being as lower oil prices leads to lower gas prices, allowing consumers to spend more on other things, Cramer hopes oil prices will fall. It's not that simple, though. The market would be glad to see lower oil prices due to oversupply, but would sell-off if oil falls because of a slowing of demand.
Second, Cramer said we're in a no-man's land for earnings. Typically, he'd want earnings estimates to stay the same or go higher for big industrials. These companies have said things are going well, even as their stocks took a 20 percent hit in some cases. Cramer wonders if it would be better if a couple of them "just gave up the ghost," allowing for a capitulation from people who own these stocks. He thinks it would bring about a bottom. But first, he thinks you'd need estimates so low they can be beaten easily.
Third, the market is unsure about how to view a U.S. debt downgrade. Would it be a catastrophe, or would it cause Congress to pass real budget reform instead of simply raising the debt ceiling, Cramer said.
Fourth, Cramer thinks the market is ambivalent about employment. If we get a couple good employment numbers, some think the Fed will start tightening and we'll slip back into the abyss. Cramer doesn't buy that argument, but he hears it a lot.
Fifth, people are concerned China could have a hard landing. Cramer said we should want a soft landing, meaning the economy slows down, inflation is stomped out and its central bank can declare victory and stop raising rates. But many think the central bank can't control things and believe the tightenings will continue for sometime.
Sixth, the market can't decide on the rotation into the soft goods. It wants an area to make money in, but there's so little money coming into the market, we can't have more than one area working at once. So if the industrials are working, the consumer goods fail and vice versa.
Seventh, Cramer said the market needs to get oversold. He thinks the market needs to extend to the downside, so a multi-week rebound can occur.
Eighth, the economy needs more stimulus, but we can't afford it. Like the debt ceiling, it's important to cut back, Cramer said. Congress needs to stop worrying about smaller, near-term costs and think big picture, he added.
Ninth, the market thought a weak dollar is good, but the whole time the dollar was rallying as of late, the market has been lousy. It's unclear whether a strong or a weak dollar is better. It's clear a weak dollar helps boost U.S. exports, but we're not sure if the dollar weakness is caused by a lack of confidence in our market.
Finally, Cramer thinks we need fewer bulls. The bear-bull ratio will come out on Wednesday. The way for you to lose bulls is for the market to go down, not up. That's why Cramer thinks the best way we can get to a bottom is to simply go lower and make all stocks look cheap.
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