Jim Cramer: Stock picking is all about patterns

When money flows out of the financial stocks, the financial technology segment of the market draws interest from amateur buyers, who place bets on their stocks, CNBC’s Jim Cramer said Tuesday.

“Whenever the bank stocks go down, we immediately get a massive amount of option-call buying in PayPal and Square,” the “Mad Money” host said. “The market makers who have to short the calls to them and then short the stock to protect themselves are getting hurt. They’re overwhelmed by endless buying, the likes of which they’ve never seen.”

The comments come after the stocks of JPMorgan and Citigroup — both having announced quarterly results before the market opened — fell about 2% and 5%, respectively, despite posting top- and bottom-line beats in their quarterly reports.

That’s because Wall Street has little interest in owning banking stocks, Cramer said. The sector has been pushed to the limit, given the precarious state of the global economy, and lagged the market all year.

The stocks of Square and PayPal both rallied about 3% on the session, while the major averages snapped a four-day winning streak.

“The buyers won’t quit and the [short sellers] keep getting blasted to pieces because of these novel young buyers who just don’t understand the way it’s done and think they’re being geniuses,” Cramer said. “I don’t know how these buyers get out of their positions, but their willingness to pay up for PayPal and Square is shocking. Professionals hate moving stocks up with their own buying.”

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[tuckerbledsoe]

Unpopular opinion:
Don’t watch Cramers videos if you’re just going to criticize him every single time

[tirthachester]

Cramer basically called out all of wallstreetbets

[georgerobinson]

There are a lot of strategies to make tongue-wetting profit that the average joes don't know. . Personally, the financial-market for me seems the only way forward with my long time horizon (accrued roughly $457k in gains since Mid 2021 ) but if you don’t have that fortune of time it’s a tough market out there almost nowhere feels safe!

[mikemartin]

You all should consider looking into Agenus (Agen). The company has been around since 1994. They’ve had a rocky road in the past but they now have gotten it together.


They’re an immuno-therapy company but they also produce cell therapy (INKT’S), through their subsidiary company Agentus and they also produce vaccines.

They also have the most powerful adjuvant (QS-21) on the market.

Their main product and near future revenue generators are their PD-1 and CTLA-4 CPMS. Both are currently fast tracked for second line cervical cancer and have currently initiated a rolling BLA submission. The data is compelling and suggests that their PD-1 is as good if not, better than Merck’s Pembro (Keytruda) in CC. And in combination, it’s definitely superior to Keytruda in CC. Projected revenue for the drugs will be around ~165M domestically only. They have also partnered with a chinese pharma company called Betta pharmaceuticals for international rights in greater China. Agenus will be receiving milestone and royalty payments accordingly. Expansion of these two drugs will yield higher revenue. They’re also looking into partnering in Europe. Projected domestic and international revenue could be significantly higher than the ~165m I quoted for domestic sales.

However, the biggest product they may have could be a potential multi blockbuster which is their next generation CTLA-4 1181. This is what most investors are banking on. They’re already seeing CR’s (complete responses) in Phase 1. It’s showing more than 70 percent clinical benefit (not to be confused with ORR.)

Ctla-4 is notorious for being toxic but agenus has manufacturing a very tolerable version that has low toxicity levels. This is huge.

I believe they have 10 CPMS in the clinic and somewhere around 10 in preclinical. They have partnerships with GILEAD, MERCK, GLAXOSMITHKLINE, INCYTE AND BETTA PHARMACEUTICALS.
I’ve mentioned most of the pros on the company. The only con is, they need capital to market the product once approved and for label expansion.

They may need to dilute or continue to do what they’ve been doing successfully which is partnering up with someone for a cash injection. But dilution at this stage may be looked at in a positive light considering their active pipeline. I hope you all enjoyed my synopsis. GLTA!!

[collectiblechris]

One of the best mad money episodes imo

[kxmode]

Patterns only work if you can understand algorithms because, you know, markets are math-heavy. Most day traders don't buy and sell on patterns. They buy and sell on algorithms. Many combine algorithms and machine learning to make big purchase or selling decisions. It also partially explains why there's a seeming disconnect between what's going in the market and what's happening in reality. People like Cramer continue to lament, "what's going on with this market?!" Cramer is an old-school dinosaur trying to work in an environment that has long since evolved from his younger years.

The market is a GIANT math class. If virtually every short-term and day trade is based on algorithms, then algorithms are what people need to be aware of in their decision making. However, what day traders don't use algorithms for are long term trades. Meaning a company's long-term performance will always come through in the end over a 5-, 10-, and 15-year or more outcome.

BTW Cramer's Apple example isn't a pattern or algorithmically-based recommendation. He's hedging the decision to buy on the likelihood that people will flock to buy the new phone. He won't know the results of that hedge until Apple's quarterly or 2020 annual results. That's not a day trade recommendation. That's a long term recommendation. If you're going to go long term, it would be better to put your money in a 5-star rated mutual or ETF that owns a sizeable number of Apple shares alongside other heavyweights like NVidia, Intel, Microsoft, and the like. In other words, mitigate your risk by diversifying your ownership of blue-chip stocks.

[Buckzoo]

Apple’s Incremental changes, like evolution, doesn’t look like much on yearly basis. But when you look back in 5 or 10 years, the change is astounding. When the iPhone can do was mostly impossible 10 years ago. Revolution technology from Apple can’t be an iPhone.

[Fiverr]

I invest and I don't rarely ever trade. Thats how you make the big $$.

[cybersteady]

When rates are low, Inflation hits, bonds are crap. Equities move higher

[therolandx]

Apple has aTwo Trillion market cap and a 37 P/E. It takes a lot of profitable sales to move that needle.

[florenciovela]

I'M ALL IN TESLA STOCK..IT'S A ROCKET OF THE A STOCK!!!
i've ordered the tri cybertruck fsd.. & thinking of the S model too!!

[ryanmoon]

I have been trading for about 6 months now and just about every trade backfires and slaps me in my face. Nearly impossible for me to catch more than a few points . I try to do top down analysis but it doesn't work for me . I say to myself, clearly I'm in the 90% that lose money, so I open a demo account, do my analysis, then take the opposite of what I would normally take and get the same result. I'm starting to feel hopeless, any advice for a struggling trader?

[nishantagarwal]

This is the guy who said on Friday that if a stimulus deal wasn't announced by Monday there will be a selloff.

[UrbanFinance]

lol - people always hating on the young Robinhood buyers. I personally love all of my Robinhood people. This has been a great year.

[sounderglintiii]

OCT HISTORY SAYS THERE IS A CORRECTION COMING!

[bradwest]

segment had nothing to do with patterns, fyi

[larryleininger]

Jim Cramer origination job keep it up I like it it's nice news

[emanuelkaiser]

5:41 He misspoke ? : 'market makers have to short the calls and BUY the stock to protect themselves...' Otherwise it makes no sense.

[t-raidenthunderbolt]

Shout out to Jim giving props to my Seahawks! :)

[zacharywalker]

What would be considered a full position? Thank you