At 4 00 though sometimes go into extra innings but at least we got some sports, it happens to be in the form of a stock market had sports gamblers descend because they have Nothing Better to do, nothing else to do. Does that explain the action today when the dow gained 131 points and s p claimed nasdaq jumped but be careful, there were late day reversals or just investors pouring money into the same members of the new high list based on a winners win philosophy maybe driven by foreign buyers honestly, at this point it could be all three and the problem with these constituent sees is they make things more dangerous for the rest of us how do i know this i made it up no let me first, i did some first class work by my friend david, the master of research at goldman sachs. In his mustread u. S. Weekly kick start, he talks about how Foreign Investors with largest net buyers of u. S. Stocks in the First Quarter and notes that there is a surge in retail trading. Retail meaning like regular people put it all together, and there is a lot of money flowing in the stocks we see equity allocation of 44 up from 40 at the beginning of the quarter and the real money is probably higher, higher than that because the estimates dont fully account for the pickup in Retail Investing activity. These constituencies push the market higher and plenty of firepower, looking good at 70 , certainly enough to keep the rally going. Historically, this is not a great base to come in on, to level. When you got tons of money that are momentum players, not index funds but actively managed funds, it can produce a toxic c combination. Im acknowledging the history and you have to understand that history is not now on the side of the moment in buyers because its later than you think. Why not . The problem is timing. This morning i saw a beautiful tweet from a viewer that made a ton of money in a short period of time by watching mad money. I told her take some money off the table now. You never want your gains to turn into losses but they rarely display that discipline because while they are all in at all times, consider the investing style of these three groups and question if youre one of them there is Foreign Investors they are notorious for coming in the end of the move because they are searching for the hottest markets in the world right now we have a hot one. That the why this overseas money is invorllved in some of the greatest bubbles of all time 1987 stocks soared into the runup to black monday. At that point japan reigned supreme. They have a 45 share of the market the u. S. Represented 33. Were half there high Single Digits again, near the end of the 80s, these japanese buyers were notorious for taking stocks allowing insiders to get in and decided to go into the United States in a big way. They controlled the opening by the same hand full of stocks no matter the price they were responsible for big chunk of the runup to the great crash of 87 at its peak the market was valued at 29 times earnings, the highest they witnessed and foreigners didnt care, japanese buyers seem to have no Price Sensitivity whatsoever lots of if i werfirms were longs and portfolio insurance using futures to hedge against potential stock declines and the portfolio surged completely, fallout crushed and gave us the 22 decline in a single day. What happened next these japanese buyers were momentum traders after the crash, there was no more momentum to be had. They sold stocks at the worst possible time. Once the ball starts coming down, it doesnt automatically start coming up. These people were the ultimate buy high sell low investors. I dont love it. I hate it. This time from europe doesnt matter where its coming from. Second group Aggressive Mutual Fund managers. The professionals love to blame individual investors like you for the. Com bubble. The big move came from portfolio mangers that bought the same stocks every day they didnt know what to do with it and loved their stocks. They had to put it to work so they doubled down on what they owned. These Money Managers are buying apple, which i love but its fueling the stocks down 72 run for the march lows, which by the ways accounted for 12 of the rally. The ones that keep bidding up microsoft, amazon, facebook, they have momentum and justify their purchases by focussing on the earnings on the out years, 2024 sometimes they fool themselves into buying the stocks, reacting to price target boosts from the analyst community. Now in a normal market, Something Like apple would run up into a Developers Conference like it had yesterday and immediately sell off only to the news thats what happened i dont like that. I like what happened today, big run. Thats how almost its always been unless there is a major revolution they wont stop buying apple stock. I dont like that. Regular people that want big returns are plowing money into the mutual funds be careful they never know when to quit a lot of them own the covid19 stocks by the way, the cramer covid, a lot of those reversed at the end of the day today, be careful they could be down tomorrow. Finally, the third group is retail traders despised by most of the old people in the business these people do seem to be transplants from the world of Sports Betting looking for a winner or loser. David is providing us i have a lot of buddies name david, with a list of their favorites they like penn national. A controlling stake in bar stool sports we had them on last night. Coincidence . They like moderna that leads the race for a covid vaccine, tesla, Royal Caribbean up nicely today, one of the nice cruise lines and mgm resorts lowest dollar casino stock and Spirit Airways stock, norwegian cruise, lowest dollar cruise stock other than carnival, low pro, marathon, lowest dollar. Still solvensolvent. This tends to make big moves along with airlines and cruise lines, textbook recovery plays lets not ignore the obvious these stocks are putting rules day trade guys at bar stool. Hes got a Huge Investment in penn national. They are partners. Hes active in the airlines and cruisers hes funny about it if you follow him on twitter. He has a big following hes moving stocks his people want action hes giving them in spades my view, ill save it for tomorrow now, of course, there are plenty of other names that keep being bid up by all three groups, retail, the europeans and mutual funds. Most of the cramer covid19 index for example. These stocks thrive in an environment where people are stuck working at home and keep being swept up in the buying which is meant by few sellers because like in 1987 they know the buyers will be back so why sell today thats a terrible philosophy, believe me it works until it doesnt. I cant do anything about the european buyers and Fund Managers think were dead wrong but i hope i can reach the home gamers that come in during this incredible run take some of your winnings and invest them into high quality stocks ideally, the next time we get a pull back, i dont care, im not looking for action the bottom line is my late mother would always say, sometimes after big wins, we went to the ponies and casinos, its good to walk out and buy yourself a darn beautiful cashmere sweater if you have big gains, ring the register and go shopping for something a little more lasting. Lets go to joseph in virginia joseph caller hey, jim, this is joseph from virginia. Whats going on caller with dining opening back up now, is crackle barrel a big place to be or should it be in pharmaceuticals and i mean, low gasoline prices let me tell you about the problem when they see the restaurants open they take out half the tables because of social distancing its called social loss making and you dont want to be in the restaurant business. You want to be in chipotle because they have drivethrough lanes. Social loss making is a bad thing. Its good for your health. Conrad in florida, conrad . Caller hi, jim from one b and b owner to another, i feel your pain. Do you know how bad that business is right now . I mean, its unbelievable. Reporter . Caller its picking up down here, thankfully. Youre one lucky guy. Whats going to work caller we combat veterans like our guns and ammo physical wi and financial. I got the physical covered i want your take on financial. Two companies on the same size, which is better rgr or swbi . I typically do not recommend gun stocks but i think stur sturm ruger has a good Balance Sheet. Im not anti gun or progun, its not just been much that we talk about. Lets go to adrian in california, adrian caller hey, jim. First time caller here. Okay. Caller what are your thoughts on going long on purple invasion link in the stages of ramping up production to meet a surge of demand. What are your thoughts i dont like that business one bit. Not one bit. And this mattress and bedding, there is too many in the area and im not there. Im not going to be on board on that situation its just not my style all right. Guys, look at this this is a list of momentum okay i like value and by the way, even though its low price, it does not mean it is value. All right. Were seeing three kinds of investors in this market for you, the home gamer, i think its time to think about taking some stuff off the table, no, im not calling it top there is a lot of money in the market but holy cow. You see the reversal at the end of the day and momentum tracks everywhere on mad tonight, two signs that a potential the signal to the party is almost over ill reveal them looking for fireworks ahead of july the fourth holiday im not negative when the market collapsed this year one of the groups hit the hardest was retail but there could be some plays worth considering the beaten down sector im going to tease you and let you find out stay with cramer announcer dont miss a second of mad money. Follow at jim cramer on twitter. Have a question . Tweet cramer, madtweets send jim an email to mad money at cnbc. Com or give us a 1800743cnbc miss something head to madmoney. Cnbc. Com. So im gonna hold on promoting you this quarter. Cool . Drop the taco. Get in the car. Does this sentra feel like a compromise to you . Wait, what. . The handling is good, right . No compromise there. Nope watch this. Umm. Bbrie. Brie brie rear automatic braking. So if this Nissan Sentra isnt gonna compromise, why should you . Youre right atta girl. The allnew Nissan Sentra. With more standard safety features than any other car in its class. With more standard safety features you say that customers maklets talk data. S. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. This rally is starting to really get under my skin its not a major irritation to make me want to sell everything and you miss out on runs in dell tonight on important restructuring. Two stocks you know i love mine are annoying that make me feel like people are beginning to get reckless. Lets call them peeves. There are so many that i am, yes, getting peeved. First peeve, hardly a day goes by without an analyst raising a target take square and paypal plays i like so much that youve heard me say i like them a million times. Both benefitting for the pandemic paypal is up 60 for the year, 60 where its valued at 202 billion. Square is up if you call to the lightning round, ill say the best in the world. But fif i had more time id explain i worry when i see the stocks going up and up and up on a series of price target boost not rallying on earnings or sales. In reality when square reported the gross payment volume that is important came in weaker and they gave you a small revenue beat, they missed the earnings by a mile. Since then the stock is from 68 to 104 again, i love square but id be lying if i said that move didnt make me uncomfortable. Paypal, ive been pounding the take on this for ages probably more than anyone than the ceo however maybe the cfo. However, im conscious that the last time paypal reported they delivered across the board disappointment they missed on volume and revenues and earnings. They made 66 cents just like square they pulled their guidance it was not a good quarter because because i believe in the long term story and surge from 128 to 172 whats the problem recommend the stock is on fire am i complaining about i did my job simple, it worries me when stocks keep running on no new news i expect the analysts who havent with the price target will concoct some tail wind. When i see people pay more and more for the same set of earnings or sells it gets my hack hack up and its been working endlessly. This kind of what is known as multiple expansion never ends well unless there is a takeover bid and that can happen or shocking acceleration and earnings like zoom i watch helplessly as these stocks are bid up day after day on nothing substantive and i think man, its people will get hurt look, im thrilled that so many new traders are coming to the market stocks are an incredible wealth again tr generator because chasing momentum is not the right approach there is momentum traders out there, not just the price target boost chasers. They are joined low dollar amount stocks that belong to failing enterprises. Stocks dont trade down to the Single Digits for no reason. In the old days, low dollar stocks made sense but we have fractional shares so there is nothing stopping you from taking a significant position in an amazon or apple. Facebook with a fractional share. As long as these momentum traders crowd into low quality si si single digit stocks consider me concerned. Price target boost and promoters two worrisome signs, you get enough and were most likely, were not there yet, most likely closer to when the party is almost over. Stick with cramer. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. Woi felt completely helpless. Hed professioonline. Consultant my entire career and business were in jeopardy. I called reputation defender. Vo take control of your online reputation. Get your free reputation report card at reputationdefender. Com. Find out your online reputation today and let the experts help you repair it. Woman they were able to restore my good name. Vo visit reputationdefender. Com or call 18778668555. Can i find an Investment Firm with a truly longterm view thats been through multiple market cycles for over 85 years . With capital group, i can. Talk to your financial professional or consultant for investment risks and information. In a market thats as confused as it is confusing, i want to take a new approach. As i told you this is a bi nrnay movement maybe these cases in the sun belt stop the america Awakens Theme working so well right in its tracks maybe the stimulus will expire in a month maybe Congress Passes another rescue package the truth is, we dont know. How about a vaccine . Maybe not a vaccine. On the short term, in the last few months as i said at the top weve seen a massive influx of new traders, many firsttimers learning by Commission Free trade and low stock prices and they love it i dont normally reck monday tra recommend trades on this show and i think youre less likely to get burned making longterm good bets on High Quality Companies with dividends but right now there are navest traders out there. I got to help them if youre going to be trading anyway, i want you to do it skillfully and thats why tonight well go off with a special edition of the help of Larry Williams trading stocks since i was a kid. Williams wrote more than a dozen books. He has a website called i really trade. Com and created indicators and got a phenomenal track record remember, when we checked in with williams near the end of april, he told us to stop worrying about the pandemic. Oh, man, was that a bold call at the time from a financial perspective, he nailed it. Williams said we would be able to reopen in mid may it flew in the face of Financial Wisdom hes probably too optimistic about covid itself given cases are surging again. Hes a money man, not an epidemiologist its one of the best calls ive seen the increasing cases didnt correlate with the market anyway he has another idea, a short term fourth of july trade. We dont normally traffic in this stuff i make that cav yacht because i dont think they want to think its a show. I got to be sure youll be rational and disciplined this is what williams heard about in 1966 from his friend who wrote about the fourth of july trade in behavior of prices on wall street he pointed out that from 1897 to 1965 the dow jones was up 81 of the time before the july fourth holiday. 81 . Williams is using this one ever since with one added twist and its been among the most consistent short term trades in his entire arsenal take a look at the daily chart of the s p 500 in mini futures going back to early may. Okay the blue line is the seasonal pattern, the way the s p trades this time of year historically from late june through the first weeks of july you usually get a substantial seasonal rally i know we had a rally by bear with me. Put money in an index fund for the next month not so far if you really want to trade, you have to go into it with more than just an idea. You need a well defined entry point and well defined exit point no matter what thats why williams looked at the action to find the best moment to start this fourth of july trade using the s p 500 crucially and i want you to understand this, he used what is known as the 2,000 stop lose order meaning the broker would automatically sell if we got a sizable decline and sold it into the first profita