Wait to buy as market reverses

CNBC’s Jim Cramer unpacked Thursday’s market action and told investors to take a pause and figure out what stocks are worth buying on weakness.

“I think that you have to wait for a day before you make any decisions to buy,” he said, adding that despite the day’s losses, the market is not yet oversold. “But you should identify what you like tonight…and be ready for tomorrow, because we will definitely see bargains developing.”

The indexes tumbled Thursday after climbing early in the session, led down by a stunning reversal in Nvidia stock. The artificial intelligence darling popped in extended trading after reporting a strong quarter Wednesday night, but finished Thursday down a little over 3%. The Dow Jones Industrial Average lost 0.84%, the S&P 500 fell 1.56% and the tech-heavy Nasdaq Composite shed 2.16%.

Thursday’s session is a reminder that a company’s performance may not accurately reflect its stock price, according to Cramer. He suggested there could be more “pain” to come for any company that delivers a great quarter but still finishes the session down.

He reviewed a number of factors that could have contributed to the market losses, including declines “in the most elemental of tech stocks,” such as basic semiconductor names, that rallied for months but have weathered losses over the past few days. Cramer mentioned that cryptocurrency stocks, especially those related to Bitcoin, have seen declines, suggesting they can lead the tech sector down. He also indicated investors are worried about the economy and fear the Federal Reserve will not cut rates in December because of new data that shows greater-than-anticipated job creation in September.

Cramer advised keeping an eye on the tech, saying there are some high-quality stocks whose shares have fallen along with with the sector as a whole.

“I want to see what holds tomorrow, stocks that’ve come down too far too fast where the expectations are too low and the opportunities too great,” Cramer said. “Those are the ones I’m looking to buy on weakness, especially the high-quality techs that are now being thrown away with the Bitcoin bathwater.”