Cramer says don't trust this stock market rebound yet: 'I think you have to be careful'

Published Tue, Sep 21 202110:53 AM EDTUpdated Tue, Sep 21 202111:28 AM EDT

CNBC's Jim Cramer — one day after Monday's stock market plunge — said investors should be wary about trying to buy in just yet, even as the major Wall Street benchmarks initially bounced higher. "I'm not saying get long," Cramer said Tuesday on "Squawk on the Street" moments after the opening bell. "I think you have to be very careful with this opening." "There are a lot of people who bought stock when the market was much lower," he said. "I do think we're at moment where a lot of buyers who came into the market when it was down big say, 'I can take a chance to take a profit.'" Cramer has been telling investors since last week to sell ahead of the back half of the month , which historically has been the weakest stretch of the often troublesome September and early October period. "I've been encouraging you to sell ahead of what's usually the weakest time of year," Cramer said Monday evening on CNBC's "Mad Money." "I can't turn positive until I find an actual reason to change my mind. For the moment, we're not getting any." The Dow Jones Industrial Average rebounded over 300 points early Tuesday, before giving up the bulk of those gains. The 30-stock average had its worst day since July 19, closing down 614 points, or nearly 1.8%. At its low, the Dow was off 971 points earlier in the day. The Nasdaq Composite and S & P 500 also gave up some of their gains early Tuesday one day after they had their worst days since May. The Nasdaq fell 2.2% on Monday, while the S & P 505 slid 1.7%. Investor concerns Monday included risks over this week's Federal Reserve meeting, elevated Covid cases in the U.S., debt ceiling brinkmanship in Washington and possible financial market contagion from embattled Chinese developer Evergrande . While the three U.S. stock benchmarks were lower for the month, they were still solidly higher for the year. The Dow was up 11% year to date through Monday's close, while the S & P 500 had gained 16%. The Nasdaq had climbed 14% over that time period.

Jim Cramer

Scott Mlyn | CNBC

CNBC's Jim Cramer — one day after Monday's stock market plunge — said investors should be wary about trying to buy in just yet, even as the major Wall Street benchmarks initially bounced higher.