CNBC’s Jim Cramer said Monday that stocks in the benchmark S&P 500 index are likely to rise next month.
“The charts, as interpreted by the legendary Larry Williams, suggest that the Santa Claus rally is coming to town next month and you need to prepare for it or risk being left behind,” he said. he stated, referring to the market phenomenon in which stocks gain towards the end of the year.
investment related news
Cramer pointed out that Williams said end of october – which marked a major month for equities this year – that stocks could rally through the end of 2022. “Since then we have had a very good run, so as the holidays approach we have to ask can it continue?” Cramer said.
He first looked at the S&P 500 daily chart to explain Williams’ analysis.
The blue line represents the Williams pattern of the index’s seasonal pattern, or in other words, how it has historically traded at any given time of year. The trend tends to be bullish for stocks through the end of the year, meaning the market’s recent strength may be far from over, according to Cramer.
“Williams points out that there are generally two sweet spots for the S&P at this time of year: the first extends through late November, the second through mid-December,” he said. he declares.
Cramer also analyzed a chart of the S&P 500 that shows Williams’ short-term cycle forecast in red.
If this cycle repeats itself, as it has in recent years, stocks could fall until the end of November. However, it is possible that the S&P 500 will take off in early December, according to Cramer.
“Between the seasonal pattern and the short-term cycle, as well as the extremely positive long-term cycle that we covered a few weeks ago, he’s seeing a lot of green lights to start buying,” Cramer said.
For more analysis, watch Cramer’s full explanation below.