Jim Cramer is selling stocks as the S&P 500 flashes overbought — but a $100 bet from 2000 tells a different story

On a recent “Morning Meeting” livestream by CNBC’s Investing Club, Jim Cramer warned that the stock market is currently overbought (1). As of April 17, the S&P is up 1.18% at 7,124 points (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.

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).

Ultimately, whether you follow Cramer’s advice is based on your personal financial situation and portfolio.

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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).”