Home » Charts suggest the market could rally after its current ‘short-term volatility spike,’ Jim Cramer says
CNBC’s Jim Cramer said Wednesday that the market is poised to bottom and rally again by Monday, leaning on analysis from Option Pit founder and volatility expert Mark Sebastian.
“The charts as interpreted by Mark Sebastian say we’re currently in the middle of a short-term volatility spike, and once it’s over, we’re going to return to the post-March bottom environment where stocks can easily go higher,” the “Mad Money” host said.
Cramer first explained the relationship between the S&P 500 and the CBOE Volatility Index, also known as a fear gauge.
“Because the volatility index reflects fear, it’s normal for it and the S&P to move in opposite directions,” Cramer said, adding that that’s what happened Wednesday. “It’s when they move in the same direction that you have to start asking questions about the sustainability of the market’s trajectory.”
The Dow Jones Industrial Average slid 0.42% on Wednesday while the S&P 500 dropped 0.97%. The Nasdaq Composite decreased 2.22%.
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