Jim Cramer: The Market Is Very Overbought

Wall Street has smashed records over the past two days in a breakneck three-day run. But TheStreet's Jim Cramer said it could be time to take some profits.

The S&P 500 secured a record close of 2,152.14 on Tuesday, its second day of record closes after topping its highs on Monday for the first time in 14 months. The Dow climbed to 18,347.67, breaking a previous all-time record from May last year. The Nasdaq erased all 2016 losses to turn higher for the year to date.

"I have certain touchstones I use," added Cramer. "I pay for an S&P proprietary oscillator that comes out after the close... and it came in at plus-10 last night. Plus-10 has historically been a level where I've said, 'take profits, trim a little.'"

Stocks enjoyed a rebound on Friday as a better-than-expected U.S. jobs report for June brought relief over the state of the U.S. economy. Benchmark indexes have now erased all losses suffered over a Brexit-related selloff.

The S&P 500 is now up more than 5% since the beginning of the year, the Dow has jumped 5.3%, and the Nasdaq has increased just 0.11%.
"It doesn't necessarily mean the market is going to go down," said Cramer of the S&P oscillator's measures. "It's been right about four out of five times ... I just think it's important to point that out that it hasn't really betrayed me that much."