The charts show the S&P 500 is in a pivotal moment, Kramer says.

CNBC’s Jim Cramer on Wednesday said the benchmark S&P 500 is at a crossroads, ready to either fall further or rise higher.

“The charts, as interpreted by Jessica Inskip, suggest that we are all at a very important moment in which the S&P 500 has found an equilibrium between a support level and a resistance ceiling. At this point, something has to give way,” he said. said.

Shares fell on Wednesday after fresh retail sales data for December renewed fears of a recession. Investors also took profits earlier this month, helped by weak economic data showing the Federal Reserve is winning the fight against inflation.

The S&P 500 fell to its lowest level in about a month, while the Nasdaq broke a seven-day streak.

To explain the analysis from Inskip, who is the director of products and training at OptionsPlay, Kramer studied the S&P 500 daily chart for November 2021.

The chart shows that the reporting season is often a time of volatility marked by strong ups and downs. It also shows that the S&P 500 has been in a downtrend for over a year now, with the downtrend line acting as a resistance ceiling for the market since the Federal Reserve began fighting inflation in November 2021, according to Cramer.

Inskip notes that the ceiling has never been exceeded, even after strong growth over the past two revenue cycles, he added.

But while the last two reporting seasons have started near the lower end of trading, the current fourth-quarter reporting season saw the S&P 500 start right below the ceiling, Cramer said.

“Good [earnings] The numbers may give us more upside potential than we’ve seen in the past few quarters, but poor numbers could mean the S&P is heading back to the lower end of the range.” he said.

For a more detailed analysis, see Cramer’s full explanation below.

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