Jim Cramer: We have too many bulls

"When most investors are bullish, it means, well, there's no one left to buy," "Mad Money" host Jim Cramer said in deciphering Thursday's market declines. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Wall Street is saddled with too many sellers and not enough buyers, CNBC’s Jim Cramer said after the stock market closed Thursday.

“We don’t have too many bears, we have too many bulls,” the “Mad Money” host said. “When most investors are bullish, it means, well, there’s no one left to buy.”

The major averages all slid during the trading day as daily coronavirus diagnoses in the U.S. continued to rise. The Dow Jones Industrial Average closed 317 points lower at 29,080.17 for a 1.1% fall. The S&P 500 and Nasdaq Composite also closed roughly 1% lower, finishing at 3,537.01 and 11,709.59, respectively.

“Maybe that’s why the averages rolled over today,” Cramer said.

Cramer hinged that possibility on bullish outlooks provided by a number of strategists that he follows closely.

Mike Wilson, a Morgan Stanley strategist, in a Thursday morning appearance on “Squawk Box” said that he thinks the bull market will continue to march higher, though stocks are running through a “tricky” moment. He suggested the market got exhausted after putting up a big run that started prior to Election Day last week and was powered even higher on positive news from a Covid-19 vaccine study earlier.

Wilson recommended moving forward with a barbell strategy to give portfolios exposure to both growth and reopening stocks as the country continues to battle through an uncertain environment amid a devastating pandemic.

He’s not alone in having a bullish forecast. David Kostin, a Goldman Sachs equity strategist, the day prior wrote in a note that he sees 20% expansion in the broad S&P index by the end of 2021 as investors trade stocks higher on vaccine optimism and due to divided government in Washington.

Cramer, however, issued a cautious tone about the market at least in the near term as he has in recent days, advising viewers that it’s more difficult to find buyers to pay up for stocks when there are less bearish, or pessimistic, investors to convert to the bull thesis.

“When one strategist says everyone’s bearish, well that’s a listen up moment. When two strategists say everyone’s bearish, you might get a little suspicious,” the host said. “But when three big-shot strategists say everyone’s bearish, you’ve gotta figure the consensus is wrong.”

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