A number of technical and anecdotal signs will tell investors that the stock market has seen its true bottom after its brutal October swings, CNBC’s Jim Cramer said Thursday as stocks seemed to recover.
Some of the technical signs already seem to indicate a bottom already, the “Mad Money” host said. The Cboe Volatility Index, also known as the market’s fear index, has hit its peak and made a lower high in the last few weeks, meaning the worst of the pain could be over, he said.
Moreover, the S&P oscillator Cramer follows to know when there’s too much selling pressure indicates that the market is oversold, even as Cramer saw some room for more selling.
But based on the anecdotal signs, the “Mad Money” host wasn’t sure the negativity had peaked. He pointed to his Twitter feed — not as negative as he would like — and the front page of the New York Times.
“The New York Times has an article about the market’s losses on the front page, but it’s only a one-column piece and it’s stuck on the left-hand side, buried, not the right-hand top where your eye naturally goes,” he said. “Normally, the pain tends to stop only when the newspapers start giving it wall-to-wall coverage.”
So, until there’s more mainstream media coverage of the losses on Wall Street and satellite trucks broadcasting live from the New York Stock Exchange, Cramer is loathe to call a bottom to the October selling.
“We haven’t reached the extremes of negativity that I’d like to see, but on the other hand, our best chartists say the bottom might be here,” he said. “My gut says you can like this market for a trade, but unless something fundamental changes with the White House or the Federal Reserve, it’s only a trade, because the carnage could resurface at any moment.”