CNBC’s Jim Cramer warned investors Tuesday that market volatility is likely to continue as recent moves have lost momentum.
“Charts interpreted by Jessica Inskip suggest the broader market may be on a bumpy road as it exits bear market rally mode,” he said. .
The Fed will push the economy into recession next year, despite Federal Reserve Chairman Jerome Powell saying last week that he may start slowing the pace of rate hikes this month. Stocks tumbled Tuesday on fears of falling into recession.
Cramer said Inskip, who predicted last month that the recent market move could last until mid-December, was seeing signs of trouble. To illustrate her analysis, he looked at her S&P 500 daily chart.
Inskip believes the market rally from mid-October to the end of last week was a bear market rally, a temporary bounce of a larger downtrend.
He also reminded investors that the market is at the mercy of the Fed’s rate hikes and that the central bank’s inflation strategy is left to the labor market.
When the better-than-expected labor data for November was released on Dec. 2, the S&P failed to break out of two major caps of resistance.
“Inskip thinks it’s back in bear market mode,” said Cramer. “The S&P can get out of this new trajectory, but unless it breaks above last Friday’s level, the S&P will not be very confident in a rebound.”
For a detailed analysis, see Cramer’s full explanation below.