Jim Cramer of CNBC said on Tuesday that the S&P 500 is at a critical juncture that could lead to an up or down trajectory.
“The charts, as interpreted by Carolyn Boroden, suggest that the S&P 500 may be associated with short-term turbulence if it fails to break above last week’s highs,” he said.
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The S&P 500 and Nasdaq Composite closed lower on Tuesday, while the Dow Jones Industrial Average rose slightly as stocks struggled to recover from the previous day’s losses caused by protests against Covid restrictions in China.
To explain Boroden’s analysis, Cramer studied the S&P 500 daily chart.
According to Cramer, the technical analyst sees that the index is approaching an important barrier that could create a real problem for its ability to continue to rise.
In particular, the S&P 500’s recent rise from mid-October lows is similar in scale to its rally from late 2021 to early January 2022, he explained. When the rally that began late last year peaked on January 4, the index saw a “nightmare” drop of 1,327 points to last month’s lows.
“She doesn’t say rally is toast. But Boroden says the S&P needs to get over that hurdle — it needs to break above last week’s high,” he said, adding: “In short, she sees this as the deciding factor. moment for the S&P 500, at least in the short term.”
For a more detailed analysis, see Cramer’s full explanation below.