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Looking Ahead With Caution

Cramer monitors flows to predict the market's direction today.
Author:

OK, what could go wrong? What keeps us from putting all our money to work?

We monitor flows. We think that this last ramp-up in the

NDX

and the

S&P

took out the "short-base."

Let me put that in real English: People who were betting against the market once again had to cover because the dip held. We have seen this pattern several times.

Day one: The

Fed

hikes, the market rallies, and the shorts cover. That's the intraday spike you saw yesterday.

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Day two: We feel like we are out of the woods. People want to get longer

because of the action yesterday

.

But if the action were just "short-covering," then we run the risk of an unsustainable ramp-up here. In fact, the trader in me says we should be more careful here than yesterday because we don't have that natural buyer, the short-seller.

Is this a killer worry? No. But it does keep us from throwing more money at the market now that it is up. That, and my

dinner with the

Trading Goddess

, keep me from piling on up here.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.