This article originally appeared on August 30, 2013 on RealMoney. To read more content like this + see inside Jim Cramer's multi-million dollar portfolio for FREE Click Here NOW.
Today's the kind of day that tests your mettle because you are buying or selling in thin volume. Some things are looking good (such as rates and the PMI), but what awaits us on the macro front -- Syria, Congress and Labor Department employment reports -- can trump anything we see on our screen.
There are two constants though: Neither China nor Europe is a headwind. These two have a degree of momentum that could break the fall of any of our man-made calamities.
Sometimes it seems that the path of least resistance is to cut and run. We can all see that this market could be down a quick 4% or 5% from current levels if everything in the American "parade of horribles" comes true.My problem is, what if they don't? What happens if our government actually functions and we get in sync with Europe and China? Are we going to be able to get back into Eaton (ETN - Get Report) or Honeywell (HON - Get Report)? Will Boeing (BA - Get Report) leave us behind? Will the banks be able to settle in to a world where 10-year rates stay at 3% and the public adjusts to the not-as-great housing affordability of the moment simply because of pent-up demand? Will the autos take off because even if the U.S. is weaker, the real problems are overseas and they are turning from headwinds to tailwinds? I know that at my hedge fund, I would be tempted to press the short bet, assuming that I could pick up maybe 2% on the downside if one of these issues goes awry, which would seem to be the correct view. But that level of nimbleness is so difficult to fathom that it needs the precision of an Olympic diver to navigate. So we trim our portfolios. For Action Alerts PLUS, we are selling $2 for every dollar we put in until that situation reverses 3%, 4% or 5% lower to where the market reflects the uncertainties our government has created for us. -- Written by Jim Cramer
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV