FInally, Cramer tried to pinpoint the cause of the stock market’s wild swings in the last several weeks.
For the “Mad Money” host, it came down to volume, which has been particularly thin of late. As he often says, volume is like a polygraph for stocks: moves on thin volume mean the market is probably lying, while moves on high volume tend to be truthful.
This has amounted to a battle between index funds and corporate buyers on the bulls’ side, and exchange-traded fund sellers and individual sellers on the bears’ side, Cramer said.
“A market like this is inherently treacherous,” he said. “While individual buyers of common stock made an appearance this afternoon as the averages rebounded, they didn’t come out in very large numbers.”
“I think these buyers have been abused and discouraged and need the protection of the SEC because I think they’re being fleeced and driven out of the greatest wealth creator known to man,” he continued. “That’s what’s behind … the volatility. That’s behind the ridiculous exaggeration of every move in this market, both up and down. I don’t expect anything to change until we get a thorough investigation by the SEC about how this is all happening.”
Disclosure: Cramer’s charitable trust owns shares of Apple and Cisco Systems.
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