Forget about using the the futures market as a weathervane, Jim Cramer told his Mad Money viewers Monday. Use it instead as buying opportunity.
On Monday, in the early pre-market, the futures signaled a weak opening for stocks. But Cramer noted that these futures are thinly traded and are often dead wrong, as they were today.
That doesn’t mean the futures are worthless, however. When used opportunistically, Cramer said, they can create great bargains.
It all starts with your world view. Cramer explained that his world view for the next six months is positive. We have mostly transitory inflation, gridlock in Congress and great earnings. There’s also a ton of new money coming into the market, which doesn’t signal a top, it signals that stocks are still the only game in town with bond yields so low.
So when the futures send shares of Walt Disney (DIS) – Get Report lower, that’s the time to pounce. Shares of Disney closed up 4% by the close thanks to a strong opening weekend for the movie Black Widow.
The futures markets also created an opportunity to trade both Goldman Sachs (GS) – Get Report and JPMorgan Chase (JPM) – Get Report, Cramer added. Both stocks were sharply lower at the open, only to rebound hard by the close.
As long as you’re opportunistic, and don’t buy all at once, Cramer said the futures are a great way to snap up bargains. Just never use them as a gauge of where the markets are headed next. Use your intuition and your world view for that.
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Cramer’s Agenda for the SEC
Now that Securities and Exchange Commission Chairman Gary Gensler has had a few months to settle into his new post, Cramer said it’s time for the regulatory agency to get to work, and boy, do they have a lot on their plates.
Topping Cramer’s wishlist of priorities the SEC must address as soon as possible is cracking down on Chinese IPOs. Chinese companies simply don’t need to abide by U.S. accounting rules and most companies are far inferior to their U.S. counterparts. Cramer said he’d ban all Chinese IPOs that fail to comply with our rules.
Over on Real Money, Cramer says he doesn’t know why the U.S. government doesn’t demand the same level of disclosure for Chinese IPOS that it insists U.S. companies give. Why should we let the Chinese off the hook? Read more of his investing insights in The Didi Fiasco Makes Clear Not to Invest in Chinese IPOs.
Second, Cramer said the SEC needs to take ownership over cryptocurrencies and ensure transparency and a level playing field for all investors. Next, he would crack down on digital pump-and-dump schemes that recently took up shares of Wendy’s (WEN) – Get Report and NewEgg (NEGG) – Get Report, only to see shares crash back down after the pumpers exited with their winnings.
Cramer said the SEC must also tackle institutional manipulation. Hedge funds are being allowed to borrow far too much money with excess leverage and every time a firm goes belly-up, we all pay the price.
Rounding out Cramer ‘s list of priorities were crackdowns on SPACs, many of which have no real business, only hopes and dreams. He’d also clamp down on robotic trading that shuts out individual investors who can’t access the markets in milliseconds.
Finally, he’d add new rules for members of Congress, who are profiting while serving thanks to blind trusts and shell corporations.
On Real Money, Cramer keys in on the companies and CEOs he knows best. Get more of his insights with a free trial subscription to Real Money.
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At the time of publication, Cramer’s Action Alerts PLUS had a position in the stocks mentioned.