Window Dressing Season

“Sometimes it feels like there’s no pattern the markets,” Jim Cramer said on Tuesday’s “Mad Money” TV show. Just look at today’s action in the markets, for example, Coca-Cola Company (KO) and General Mills Inc. (GIS) looked strong, but so did PPG Industries Inc. (PPG) and Chevron Corp. (CVX), companies that need a solid economy to do well. The action within individual sectors was just as confusing. Tech kings Google (GOOG) and Apple Inc. (NASDAQ:AAPL) were battered, while Texas Instruments Inc. (TXN) and Qualcomm (QCOM) ended the day up. Natural-gas stocks like Ultra Petroleum Corp. (UPL) and Cabot Oil & Gas Corporation (COG) ripped higher, while National-Oilwell Varco Inc. (NOV) and Transocean Ltd. (NYSE:RIG) got hammered. Cramer told viewers that we are just three days away from the end of the month, and the end of the fiscal year for many hedge funds and mutual funds. “The heads of the market’s big hedge funds and mutual funds are in a desperate race with clock, and they’re scrambling to show good performance,” Cramer said. He explained that one strategy these funds use to improve performance for the quarter and year is to buy more of the stocks they already own, which often times pushes stock prices higher. “Every dollar matters to these guys,” Cramer said, “so even a small bump can make a huge difference in a billion dollar portfolio.” This all happens in the last few days of the month when regulators aren’t paying attention, so Cramer advised viewers to watch stocks on Tuesday, Wednesday, and Thursday specifically, as hedge and mutual funds push up their biggest holdings. “On Thursday afternoon they’ll stop,” he said, “and defend their markup.” Cramer mentioned the markets will not make much sense for the next three days. He said if you want to sell some stocks, wait until Thursday afternoon to get the best price. If you want to buy the best names, he advised waiting until next week’s trading. Join the fastest growing community of small cap investors at Stockhideout.com

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