CNBC’s Jim Cramer said on Wednesday that the market could fall later this year as stocks tumble and Wall Street’s optimism wanes.
“The chart, as interpreted by Tom Demark, suggests that with just a little more weakness, this market has finally got a legitimate opportunity to go down for the first time since everything started last November. .. I hope he is right, and more importantly, I think he is right,” he said.
,mad Money“The host said that DeMark and his team have a 13-step buy-or-sell countdown model that helps them find the highs and lows in the market. The trend eventually ends when a certain number of numbers move in the same direction. There are sessions going on in me, he said.
He said the key to finding the bottom is to recognize when sellers have run out of steam, and that everyone who plans to sell already has it.
To begin the explanation of DeMark’s analysis, Cramer first examined the daily chart of the Dow Jones Industrial Average.
According to DeMark, the Dow hit 13 on the buy countdown on June 17, but there is a secondary countdown that is still at 12, Cramer said.
“That means the Dow may have bottomed out last month or there may be one last downdraft that takes us to lower lows,” he said.
According to Cramer, DeMark also believes there are parallels between the performance of the Dow this year and the performance represented by the blue line on the chart in 1973.
“He was still using the same 13-step countdown back then, and it worked just like it does now. He believes the relationship is remarkable and, if it does, we’ll be on the next page.” Let’s see some more choppy trading for the Dow on the pair. Months, followed by a strong rally in September and October… but then a big drop towards the end of the year,” he said.
“If DeMark is right, we could be seeing an incredible business right now,” he said.
For more analysis, watch Cramer’s video of the full explanation below.