Charts suggest stocks may fall further ahead of Santa’s rally – .

Charts suggest stocks may fall further ahead of Santa’s rally – .

There could be more short-term pain for the stock market before it changes course and stages a year-end Santa rally, CNBC’s Jim Cramer said on Wednesday, relying on Larry Williams’ technical analysis.
“Charts and historical data, as interpreted by Larry Williams, suggest that we are looking at a strong rally towards the end of the month – not at this time,” said the host of ‘Mad Money’. “But we could also have another head start before this market stabilizes. “

” My point of view? I think Larry gives you yet one more reason to start opportunistically buying on the downside, “as Wall Street digests concerns over the Covid omicron variant, Cramer added.

Williams came to his general conclusion by looking at two groups of information, Cramer explained. The first deals with seasonal trends, which Williams says supports Wall Street’s belief that December is generally a strong time for stocks, especially in the second half of the month, Cramer said.

Technical analysis by Larry Williams who examines seasonal business trends in December.
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“If you only care about the seasonal model, then you would want to buy the [S&P 500] December 15… to catch the mid to month end movement, ”Cramer said.
However, Williams’ analysis determined it was a bit more complicated than that this year, Cramer said. The reason is that the market is on a low scale right now, based on the Anticipated Fall Line, which measures the amount of advancing stocks subtracted from the number of falling stocks.

“As far as Williams is concerned, this is very bad news as the averages tend to follow the expected down line. Basically this thing has already predicted the sell off we’ve had so far and Williams is concerned that the market might not be able to bottom out until this indicator turns around, ”Cramer said.

The anticipated decline line of the S&P 500, according to Larry Williams’ technical analysis.

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Using historical data, Williams believes the anticipated bearish line will turn around December 10, paving the way for the market as a whole, Cramer said.

“In other words, these cyclical forecasts confirm what we have already seen from the seasonal forecasts: They indicate a gathering of Santa Claus from mid-December to the end of December, although they also suggest that the week or next two could be difficult, ”he said.

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