Wall Street is in denial about the market’s strength, Jim Cramer said, arguing that investors are dismissing falling oil prices and what he calls the “presidential put.”
“When in doubt in this market, check the direction of oil. Ignore those who scoff at every word out of the president’s mouth,” said Cramer Wednesday on “Mad Money,” noting that President Donald Trump has often been able to talk the market out of a rut.
According to Cramer, the street chose to focus on the doom and gloom of rising oil prices, disregarding Wednesday’s pullback.
“Everyone was acting like oil was still soaring,” Cramer said.
Oil fell Wednesday amid investor optimism that the U.S. and Iran could agree to a ceasefire. The pullback followed reports that Iran received a 15-point proposal from the U.S. to end the war. On Wednesday, Iran state media said they would reject the offer and instead issued a plan out a five-point plan with conditions that the country controls the Strait of Hormuz.
International benchmark Brent Crude shed 2.17% to settle at $102.22 per barrel, while West Texas Intermediate dropped 2.2% to $90.32 per barrel following the developments.
“I’m seeing denial all over the place, and it’s really cutting into everyone’s performance,” Cramer said, noting that stocks advanced on Wednesday.
The Dow Jones Industrial Average rose 300 points. The S&P 500 and Nasdaq Composite also closed the session out modestly higher.
“Whoever is selling at that moment has to stop because the presidential put has spoken,” said Cramer. “The president likes to keep the market in the air and knows the words people want to hear.”
Cramer said investors should stop ignoring the truth of what’s occurring both in oil and the broader market.
“Stop drinking denial,” Cramer said. “You’re gonna get sick.”
