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Cramer Explains Tuesday's Rally: Trading Algorithms 'Are Still Tied To Oil'

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Cramer Explains Tuesday's Rally: Trading Algorithms 'Are Still Tied To Oil'

U.S. indices rallied Tuesday morning led by a triple digit point gain in the Dow Jones. Granted, stocks have been opened for trading for less than half an hour, and the Dow Jones Index is trading closer to 17,000 than the 18,000 level it flirted with last Thursday.

CNBC's Jim Cramer acknowledged during Tuesday's "Squawk Box" segment that his theory might sound "nutty," but the rally is attributed to oil.

Oil prices rose on Tuesday after oil workers in Norway threatened to go on strike. Norway is one Europe's largest oil producers, and a strike in the country could impact up to 7,500 oil and gas workers.

Related Link: Jim Cramer On Brexit: Dumbest Financial Mistake Ever

The price of a barrel of Brent crude rose more than 2 percent to $48.23 a barrel while WTI Crude also rose 2 percent to trade at $47.38 a barrel.

"As much as oversees matters, the fact that oil is up and the algorithms are still tied to oil," Cramer said. "And if oil is up, people feel there is less chance of a recession."

Cramer added that the rally seen Tuesday morning could last "only if oil stays up." He also suggested that Wednesday's U.S. government crude oil inventory data will show a storage that is a "little lighter," which could add further momentum to the oil trade.

Posted-In: Brent Brent Crude Oil Brexit CNBC crudeCommodities Markets Media Best of Benzinga

 

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