Technical analyst Carolyn Boroden thinks the S&P 500 could see a near-term rally soon, CNBC’s Jim Cramer said Tuesday.
“The charts, as interpreted by Carolyn Boroden, suggest that the S&P 500 is poised to give us a few days of bounce over the coming week and a half, with a real possibility that this bounce started today. “, said the “Mad Money”, said the host.
“However, she also thinks this is relatively short-term in nature – not a reason to buy stocks, but perhaps a very good reason to reposition and move into more defensive and less dangerous areas,” Cramer added. “So relax in this rally.”
Boroden predicted this swing after finding a significant number of Fibonacci timing cycles expiring between Monday and Thursday, according to Cramer. She and other market technicians use the Fibonacci strategy to spot patterns that can signal when a stock or other security might change direction.
Below is a daily chart of the S&P 500 showing the Fibonacci Sync Cycles identified by Boroden.
Boroden identified 8 Fibonacci timing cycles expiring between yesterday and Thursday.
The chart shows the eight Fibonacci timing cycles over a four day period. “To put it into perspective, when it normally tries to spot potential highs or lows, it starts to take those sync cycles seriously once there are three or more in close proximity to each other.” , said Cramer.
Cramer said that while Boroden thinks this means the market could find a temporary bottom, other parts of his technical analysis suggest there could be more downside down the road.
“Basically, the S&P still hasn’t come down low enough for the chart to scream ‘down’ and overall she thinks the technical chart is still pretty bleak,” Cramer said.
He added: “Boroden says there is good reason to expect a mid-term bottom this week, and that may have happened from today.”
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