Apr 19, 2026
On a recent "Morning Meeting" livestream by CNBC's Investing Club, Jim Cramer warned that the stock market is currently overbought (1). The S&P was up 10.4% in April (2).
According to Cramer, the S&P Short Range Oscillator is over 8%. He told CNBC (3) that the team that runs the Oscillator told him that, historically, such dramatic swings tend to be followed by a "digestion phase," in which gains slow down rather than evaporate.
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He also said that when the Oscillator is this overbought, we need to take "a little different strategy," CNBC (1) reported.
That strategy? Trimming your stocks.
By trimming your stocks — in other words, selling a portion to secure profits while the going is good — you can protect yourself from potential downturns while still holding stakes. Cramer also advises that investors not jump into stocks that are new to them just because they are rallying right now.
Should you follow Jim Cramer's advice?
Cramer is predicting that "crazy rotations are about to occur (3)." And he's not alone in predicting that economic volatility isn't going away.
Jamie Dimon, CEO of JPMorgan Chase, recently warned that a 2026 recession could be looming, citing both the war in Iran and the uptick in artificial intelligence as potential causes (4).
Turbulent times like these can make selling or trimming your stocks enticing, but it isn't necessarily the right call. Historically, the market has recovered well from major volatility, such as the dot-com bubble and the Iraq War in the early 2000s.
Despite those challenges, a $100 investment in the S&P 500 at the start of 2000 would have grown to approximately $736.82 by April 2026, representing a total return of about 637% with dividends reinvested, according to data from OfficialData.org (5).
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Ultimately, whether you follow Cramer's advice is based on your personal financial situation and portfolio.
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Trimming vs. holding
Cramer told CNBC that market rotations "can be random, and they can be frustrating." He added that quick-changing leadership can make it hard to "distinguish between meaningful opportunities and short-lived moves (3)."
That being said, it's important to assess your personal goals and risk tolerance before making any investment decisions.
If you hold stocks that are performing well, then trimming them offers a chance to keep your portfolio allocation in line with your risk tolerance.
Additionally, if a particular stock is doing so well that it's taking over the bulk of your portfolio, then trimming can negate the risk of one company having so much power over your portfolio.
If you are keen on selling out of panic, however, then you may want to stick out the peaks and valleys so you can enjoy the long-term gains of endurance during market volatility. Historically, holding investments longer is a more lucrative option.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
CNBC (1),(2),(3); Morningstar (4); Official Data (5)
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Em Norton is a Content Specialist at moneywise.com. They have been with the company since 2022.
