Cramer warns the January rally is driven by emotion and not all stocks will hold up

• Jim Cramer said early January market gains are being driven by emotion, momentum buying and turnaround optimism.
• He warned that momentum rallies, especially in AI-linked stocks, can reverse quickly once supply catches up.
• Cramer said his preferred opportunities are “mistaken identity” stocks like Amazon that never should have lagged.

CNBC’s Jim Cramer said Tuesday that early January trading shows how quickly emotion can take over markets at the start of the year, warning investors not to confuse momentum with durability.

Cramer said the market is being driven by three groups: momentum traders chasing last year’s winners, “hope springs eternal” investors buying beaten-down stocks and companies that never should have lagged in the first place.

Source: https://www.cnbc.com/2026/01/06/jim-cramer-january-rally-emotional-momentum-stocks-2026.html