Jim Cramer says the stock market is so overbought that we have to tread carefully
Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Wednesday’s key moments. 1. The major averages were mixed Wednesday. The blue-chip Dow was down about 200 points, but the S & P 500 was higher by roughly 0.3%. Leading the way is the Nasdaq , which was up almost 1%. The tech-heavy index hasn’t had a down day since March 30. The bond market was calm again, Jim Cramer noted, continuing to give stocks the breathing room they need to rally. Oil prices were not doing much either, with U.S. benchmark WTI crude up only 30 cents a barrel and still below $92. The big thing we’re watching: Our trusted S & P Short Range Oscillator has moved into extremely overbought territory, at more than plus 8%, thanks to this quick and powerful rally. When it was extremely oversold in March, we held our noses and made some buys . When the Oscillator is this overbought, we need to take “a little different strategy,” Jim said. According to the MarketEdge team behind the Oscillator, history suggests the gains will slow from here. In other words, Jim said, “The easy money has been made.” 2. The “different strategy” that Jim alluded to involves making a few trims. That’s why we sold a little more Broadcom on Wednesday, just as we did Monday morning. The stock has had a parabolic move, flying over 30% since the March 30 market bottom. “Discipline always trumps conviction,” Jim said. Broadcom’s more than 3% advance in Wednesday’s session follows the chipmaker announcing another big deal with Meta for custom AI processors. Broadcom CEO Hock Tan also said he’s leaving Meta’s board after two years of service — a move Jim applauded given the increasingly close business relationship between the two companies. “I think Hock is doing the right thing,” Jim said. 3. Jim and Director of Portfolio Analysis Jeff Marks also spent time discussing the other side of that deal: Club name Meta. Its shares closed at their lowest levels of 2026 on March 27, before embarking on a comeback rally of its own. Including its more than 1.5% advanced Wednesday, the stock has gained about 28% since its bottom. Jim indicated that he was encouraged to see Meta mount such a big move, considering all the questions that had surrounded the stock about its aggressive spending on AI talent. Last week, the company unveiled the first model created by that AI team, dubbed Muse Spark. Up to now, Meta’s AI investments have paid off by boosting its core ad business. Now, Jeff said, they wisely have a plan to monetize the Muse Spark model directly. 4. Stocks covered in Wednesday’s rapid fire at the end of the video were: Morgan Stanley , ASML , Bank of America , Cloudflare , and Snap . (Jim Cramer’s Charitable Trust is long AVGO and META. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
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