CNBC's Jim Cramer advises investors to hold off from putting new money to work as stocks pull back from their record highs. The “Mad Money” host breaks down why Elizabeth Warren's back peddle on her health care proposal is a boon for the managed-care stock of United Health. Later in the show, he takes a look at chart analysis from trader Larry Williams to get a read on the negative trading that is likely ahead in the S&P 500's future.
Put a pause on buying new stocks
“We got hammered today,” Cramer said on “Mad Money,” “and it was much more of a hammering than any of the averages [appeared], because there's not enough negativity. Once people start worrying again, stocks will come down to more reasonable levels and then you can pounce, but we're not there yet.”
Elizabeth Warren's softer stance on health care gives UnitedHealth a break
Warren's platform has called for the elimination of private health insurance, like UnitedHealth, and replacing it with a universal Medicare plan for all Americans.
However, Warren said last month that she wouldn't immediately transfer to a single-payer system. Instead, she would push to pass a bill to allow all Americans to either buy into Medicare or get covered for free through special budget rules. She wouldn't move to eliminate private insurance until her third year.
Charting a decline in the S&P 500
After enjoying weeks of record highs, investors should brace for impact in case the stock market turns ugly.
Wall Street could face some pressure in coming months as stocks revert to more attractive levels, CNBC's Jim Cramer said Monday.
“The charts as interpreted by Larry Williams suggest that the market's animal spirits are turning from bullish to bearish, at least for the next few months, and he thinks you should try to sidestep the pain here,” the host said.
Cramer's lightning round
In Cramer's lightning round, the “Mad Money” host zips through his thoughts about callers' favorite stock picks of the day.
Biogen: An analyst said earlier Monday that Biogen's Alzheimer's drug “is going to be a bust and that makes it so that I am concerned because there's no reason to stick your neck out like that, unless you kind of know something, or otherwise you got egg all over his face.”
Amgen: “I think if you want to buy Amgen — you get a chance to be able to buy it at $210 and I would take it because it's a much-better company than it was even six months ago.”
Caterpillar: “I think you want to sell some, trade around it if you are a trader, and then buy it back later. Now, why do I say that: because I don't think Caterpillar's going to have a good quarter and I am worried about more trade tariffs.”
Disclosure: Cramer's charitable trust owns shares of UnitedHealth.