Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
NEW YORK (TheStreet) -- The pattern worked again, Jim Cramer told "Mad Money" viewers Wednesday as the markets sold off on the latest words from the Federal Reserve.
Cramer said the markets have been following a predictable pattern around the last few Fed meetings. It goes something like this:
In the days leading up to a Fed meeting, the markets tend to rally as they presume the economy is too weak to stand on its own and the Fed will continue its bond-buying programs to keep interest rates low.Why does the Fed want rates low? Because that gives companies incentives to expand and hire more workers. It ignites the housing market with low interest rates. It helps companies refinance their debt to free up more cash for buybacks and dividend boosts. All of these things are good for stocks, and the market is happy to embrace a friendly Federal Reserve. But then the day of the Fed meeting arrives and investors hear, as if for the first time, that the economy is weak and the Fed has no choice but to keep buying bonds to keep things afloat. This "news" brings in waves of sellers, sending the market sharply lower -- as it did today. However, in the days after a Fed meeting, the pattern continues. Cooler heads prevail, realizing the Fed is once again our friend and -- oh, look! -- stocks just got a whole lot cheaper. Thus, the buying begins once again. Cramer still thinks now is a good time to lock in profits so investors can be ready for when the next rally is ready to begin.
Executive Decision: David WennerIn his "Executive Decision" segment, Cramer sat down with David Wenner, president and CEO of B&G Foods (BGS), the food stock that's up 212%, including reinvested dividends, since Cramer first recommended it nearly three years ago. Wenner said the grocery business is always a challenging one and B&G is always adapting its products and strategies to changing eating habits and the competitive landscape. Normally, B&G provides steady performance, he noted, although a little less so this quarter.
Select the service that is right for you!COMPARE ALL SERVICES
- $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
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV