We know why the market collapsed late Wednesday. We warned about it months ago

Every weekday the CNBC Investing Club with Jim Cramer holds a “Morning Meeting” livestream at 10:20 a.m. ET. Here’s a recap of Thursday’s key moments. 1. Wall Street on Thursday was recovering about half of the prior sessions’ late afternoon rout, which we can blame on zero-day options contracts that expire on the same day they’re purchased. Back in September, we warned members to stay away from these increasingly popular instruments. Wednesday’s session was the reason why — as options dealers who are required to hedge were forced to sell the market rally. Jim Cramer said Thursday it could happen again. “Don’t get cocky.” To understand zero-day options better and why they are nuts, take a closer look at our September commentary . 2. Thursday’s resumption of the weeks-long market rally shows that many things are going the bulls’ way, including continued cooling inflation as seen in the government’s GDP report before the bell and the struggles in oil prices that keep gas prices down and help consumers and non-energy companies alike. We still like Coterra Energy , which is about 50/50 oil and natural gas. In fact, UBS just named Club holding Coterra Energy as its No. 1 natural gas pick for 2024. We’re looking to add shares but would need to see more of a pullback since our last buys were around these levels. 3. Reflecting on Wednesday’s small Caterpillar trim, we know we had to take some off the table because of the stock’s parabolic move higher in recent weeks following an up-and-down year. It’s been a real battleground stock this year and still somewhat controversial. That’s why we wanted to book some extra profits with the market so overbought. Caterpillar hit an all-time high early Wednesday and then closed lower as the bottom fell out of the market in the late afternoon. The stock was steady Thursday. (Jim Cramer’s Charitable Trust is long CTRA, CAT. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

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