“ ‘The Dow , and the rest of the market, could have one last move higher going into the end of the week, followed by a potentially ugly sell-off.’ ”
That’s CNBC “Mad Money” host Jim Cramer summing up the analysis of Tom DeMark, a “trusted” technician known for his market-timing indicators, leading up to the November election.
“That same method that tells DeMark we’re cruising for a bruising also tells him that it might only last two or three weeks, with a possible bottom close to Election Day,” Cramer continued on his Tuesday show. “So, you’re going to have to pull the trigger and do some buying.”
DeMark’s signals accurately predicted the big September selloff in the stock market and they’re once again suggesting a similar downtrend is taking shape, Cramer explained. But before that, DeMark is looking for a solid rally in the coming days.
“Assuming this pattern holds up, he thinks we’ve got one last leg higher … before this rally runs out of steam, possibly at the end of the week,” Cramer said. “That’s not what I want to hear, but it would make sense —we’ve had a monster run going into earnings season.”
Watch the clip:
The Dow Jones Industrial Average DJIA, -0.40% gave up early gains on Wednesday to extend the prior session’s first decline in four trading days. The Nasdaq Composite COMP, -0.59% and S&P 500 SPX, -0.47% were also lower.
Originally published on MarketWatch