CNBC’s Jim Kramer said Tuesday that stocks may fall later this month and provide investors with an opportunity to add to their portfolios.
“The charts, as interpreted by Larry Williams, are that the bear market is somewhat… toast, and even if the current rally stalls, expect a big move either at the end of this month or the beginning of November,” Cramer said.
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Cramer said Williams would not be surprised if the current rally fades, but he still believes there will be a significant bottom near the end of the month, followed by a rally during Election Day on November 8.
“In other words, he thinks you should be prepared for a great buying opportunity, even if the current move is cancelled,” Cramer said.
To explain Williams’ analysis, he first examined the chart of the S&P 500 futures contract in black. The chart also contains what Williams calls a true seasonal pattern in blue.
This pattern depends on historical movement at any given point in the year, and Williams notes that the market tends to bottom in mid- to late-October, then lead to a “strong” rally.
Then he looked at the chart of the Dow Jones Industrial Average with the same true seasonal pattern.
The Dow happens to have a double bottom followed by a rally at the same time as the S&P 500, which means there should be a massive buying opportunity, he said.
For more analysis, see Kramer’s full explanation below.
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