NEW YORK (TheStreet) -- "This rally today was based on nothing, or at least nothing that was good," Jim Cramer told the viewers of his "Mad Money" TV show Tuesday.
He said simply that nobody trusts this market, and that makes rallies like today all the more painful.Cramer said he's baffled by today's market action, especially given that all the news of the day was bad. He said that everything from employment to home building, financial regulation to the oil stocks was going against the markets today, but it rallied anyway. "This is what I call a bad rally," said Cramer, "it's a rally caused by nothing more than shorts being out of position." Cramer characterized it as a rotating short squeeze, where short sellers are getting caught off guard amidst the market volatility and are forced to cover their positions. A rally like that, he concluded, can end on a dime. Cramer went further to explain that after the "flash crash" in May, where the Dow sank 1,000 points, the character of the market changed. He said that the markets now seem downright ridiculous, trading on the news of the day, or sometimes no news at all, rather than on the fundamentals or long-term trends. Cramer said that Washington is only making things worse, as it's focused on one thing and it's not jobs. He said that Washington's mantra is "punishment," punishment for healthcare, punishment for the banks, punishment for credit card companies, and now punishment for big oil. About the only stocks that make sense in this market are the ones Cramer's been preaching about, high-dividend payers and those with high growth. Other than those stocks, it's anyone's guess.
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