Jim Cramer says there's a tug-o-war playing out daily in the markets and investors need to keep an eye out for the 'doom-or-boom' scenario.
When a light appears at the end of a tunnel, sometimes it’s hopeful news for the future and sometimes it’s an oncoming train.
Jim Cramer advised his "Mad Money" viewers recently that the stock market is just such a challenge these days.
Investors are either preparing for the worst or anticipating a roaring bull market. That's how stocks like Boeing (BA) -Get Report can open sharply lower, only to end the day up 1.9%. In a "doom-or-boom" scenario, the winners can change by the hour, Cramer concluded.
The doom scenario creates a surge in the pandemic growth stocks, such as those featuring products and services for the homebound.
So what's the source of the doom? Cramer said investors are worried about COVID variants, the pending debt ceiling debate in Congress, prolonged inflation and rising geopolitical tensions with China’s government lashing out at its own biggest companies.
On the boom side, optimistic investors are looking past the latest surge in COVID cases and onto what comes next. When and if the “new normal” becomes something closer to the “old normal,” things will start looking up for many companies and industries, especially as kids go back to school and many parents can finally get back to work.
That's why this tug-of-war in the market is playing out daily, Cramer concluded, because the stocks that work in the doom scenario are exactly the ones investors would sell in the boom scenario. As Cramer has said, investors must pick which way to go based on their own world view.