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Politics is hurting your stocks, Jim Cramer proclaimed to his Mad Money viewers Monday. This year's increasingly angry presidential race is making investors less certain about the future, which in turn makes them less likely to take risks or own stocks at all.
How bad are things getting? It caught the eye of famed billionaire Warren Buffett, where in his annual letter to shareholders he said that our government is getting in the way of "investable progress." That sentiment was echoed by General Electric (GE) CEO Jeff Immelt who, in an open letter, said that the relationship between government and business is the worst he's ever seen, and our policies are only slowing growth or stopping it altogether.
The political backdrop lowers the PE ratios of the entire market, Cramer explained, and whether you're talking biotechs, pharmaceuticals, infrastructure, oil or tech, our government is becoming increasingly vocal with its anti-business rhetoric.
Cramer recalled that President Eisenhower once said the job of the government was to promote American business. But while that ideal seems to be slipping further from reach, it is only obscuring, and not eliminating, opportunities in the stock market. Great investments are still out there, he concluded. They're just getting harder to find and taking longer to realize.
Off the Charts
In his "Off the Charts" segment, Cramer once again checked in again with colleague Carolyn Boroden to see where she sees the markets heading next. Viewers will recall that Boroden correctly predicted on Jan. 26 that the rally had no staying power. Indeed, the markets peaked on Feb. 1 and subsequently bottomed on Feb. 11, where Boroden then called a "tradable low."
Boroden now see multiple Fibonacci timing cycles converging on the weekly S&P 500 chart, signaling that the market's trajectory could soon change for the better, especially if the markets are able to stage a rally tomorrow. Continued declines tomorrow would signal that the markets are entering a trading range cycle.
Turning to a chart of the Nasdaq 100, Boroden saw a reverse head-and-shoulders pattern, which would be bullish, but only if the average can hold above the 1,810 level.