Monday's market sell-off could be the first of multiple that allow investors to be patient and take advantage of in coming days, CNBC's Jim Cramer said.
"These pullbacks typically last for more than a day. I think the sellers will return, whether we get a deal with China or we don't. Be patient," the "Mad Money" host explained. "But be ready to pounce when the machines take over again and drag the averages down to unsustainably low levels in a heartbeat like we saw early this afternoon. Their indiscriminate selling can eventually give you a good entry point ... as long as you don't jump the gun."
Despite positive news that trade talks between the United States and China are progressing, the major indexes ended the session in the negative. The Dow Jones Industrial Average shed more than 200 points, the S&P 500 fell roughly 0.4 percent and the Nasdaq dipped about 0.2 percent.
Some investors decided to sell on the headlines believing that a trade agreement has already been baked into the market, but Cramer called the move "ridiculous."
"It was an unsettling reminder that stocks remain fragile and the asset class simply is not capable of handling severe selling all at once, which is the case and therefore it's almost entirely machine-driven," he said.
Cramer blamed Monday's action on machine-driven moves because the algorithms are not sensitive to price.
"That's the opposite of what actual humans do when they work orders to get a better than the average price at the end of the day," he said.
Cramer expected that the market would be hit by "turbulence" leading up to Friday's jobs report, but he disagreed with the selling that "freaked people out." Still, there is not a clear reason why
He did concede, however, that the sell-off would make sense if a trade deal falls through.
"Of course, if there's no deal then today's sellers may end up looking prescient, but I really don't think the averages reflect an imminent end to the trade war here," he said.
Cramer said Monday's sell-off could potentially be blamed on valuations, ETFs, an overbought market, and the S&P's shortcomings. He pointed out that the S&P 500 failed to surpass the 2,800 level after four attempts.
"For money managers who watch the charts, there's a good reason to get out," he said.
"The averages have rallied for so many straight weeks that you better believe there are fund managers who say, 'enough is enough, we're due for a pullback and want to get out ahead of it,'" he added. "It's been an incredible run people and those hedge fund managers know that nobody ever got hurt taking a profit ... Or maybe they're shorting a basket of stocks that they now perceive to be overvalued."
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