Cramer- "Watch Out for a Too-Hot Market"
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Cramer- "Watch Out for a Too-Hot Market"
"Watch Out for a Too-Hot Market"
By James J. Cramer
05/30/2003 10:15 AM EDT
"At one point yesterday, I was up more than 20% for my Action Alerts PLUS account. My associate, David Peltier, flagged the moment intraday.
And I had a feeling of dread. That's way too much, too soon. I had a feeling that we were back in the days when the griddle got too hot all at once.
Long-time readers of this column know that I used to speak about the griddle at my one-time favorite dinner, the Holland, on the Jersey side of the Holland Tunnel. Before the grill man changed, the griddle there used to be so hot that eggs cooked in about 10 seconds. That's terrific if you are a seasoned grill man, but most of us would burn eggs to a quick brown at that level of heat.
When it gets too hot, I like to pull back. I can't anymore, of course, because I can't trade like I used to with the restrictions on my account. But as soon as I heard that 20% figure, I knew I was in for a hammering. Sure enough, my account finished up 18% for the day and I wasn't able to dodge a thing, even with the meager sales I was allowed to make.
I can handle the griddle being hot for a little bit. But if it stays hot, I am going to have to get more cautious. We need to see a week or two where this market drifts to let the griddle cool off.
Or else we are headed for lots of burned-up portfolios or a need to raise hefty amounts of cash relatively quickly on the next animal-spirited run-up. I am sticking by my target of 9500 for the Dow, which Tyler Mathisen pointed out last night on CNBC's Closing Bell is getting pretty close. But when portfolios like mine are rocketing 2%-3% a day, that's too much. While 2%-3% up is a blast, 2%-3% down can lead to bigger fizzlings.
Or to put it another way, I am in no hurry for my eggs to be cooked, I just don't want them burned. "
(in www.realmoney.com)
By James J. Cramer
05/30/2003 10:15 AM EDT
"At one point yesterday, I was up more than 20% for my Action Alerts PLUS account. My associate, David Peltier, flagged the moment intraday.
And I had a feeling of dread. That's way too much, too soon. I had a feeling that we were back in the days when the griddle got too hot all at once.
Long-time readers of this column know that I used to speak about the griddle at my one-time favorite dinner, the Holland, on the Jersey side of the Holland Tunnel. Before the grill man changed, the griddle there used to be so hot that eggs cooked in about 10 seconds. That's terrific if you are a seasoned grill man, but most of us would burn eggs to a quick brown at that level of heat.
When it gets too hot, I like to pull back. I can't anymore, of course, because I can't trade like I used to with the restrictions on my account. But as soon as I heard that 20% figure, I knew I was in for a hammering. Sure enough, my account finished up 18% for the day and I wasn't able to dodge a thing, even with the meager sales I was allowed to make.
I can handle the griddle being hot for a little bit. But if it stays hot, I am going to have to get more cautious. We need to see a week or two where this market drifts to let the griddle cool off.
Or else we are headed for lots of burned-up portfolios or a need to raise hefty amounts of cash relatively quickly on the next animal-spirited run-up. I am sticking by my target of 9500 for the Dow, which Tyler Mathisen pointed out last night on CNBC's Closing Bell is getting pretty close. But when portfolios like mine are rocketing 2%-3% a day, that's too much. While 2%-3% up is a blast, 2%-3% down can lead to bigger fizzlings.
Or to put it another way, I am in no hurry for my eggs to be cooked, I just don't want them burned. "
(in www.realmoney.com)
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