Don’t bet against short sellers in this market, Jim Cramer warns

Cramer told investors not to buy money-losing stocks in a bet against short sellers.

After the major indices fell, the market went in favor of short sellers. The market fluctuated as it digests disappointing financial reports from companies and prepares for key inflation numbers later this week.

I don't recommend buying money-losing stocks in the hope of engineering a short squeeze in a market that presents you with plenty of opportunities to lose money. The host of " Mad Money " said that a day like today where that tactic just blows up in your face is a thing of the past.

Cramer referred to several stocks.

1. Bed Bath & Beyond
2. Upstart
3. AMC
4. Beyond Meat
5. Wayfair
6. GameStop

More investors are attempting to short-sell. Over the last five days, the GS Most Short Index has risen more than 18%. When the meme stock craze was at its peak, it's currently at its highest level.

Cramer said that this action makes money-losing stocks look attractive as long-term plays.

Good things happen to bad stocks. A lot of low quality stocks have rallied because too many hedge funds shorted them at the same time.