{"id":123754,"date":"2021-12-11T09:31:02","date_gmt":"2021-12-11T09:31:02","guid":{"rendered":"https:\/\/fin2me.com\/?p=123754"},"modified":"2021-12-11T09:31:02","modified_gmt":"2021-12-11T09:31:02","slug":"charts-suggest-the-sp-500-is-set-up-for-a-year-end-santa-rally-jim-cramer-says","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/charts-suggest-the-sp-500-is-set-up-for-a-year-end-santa-rally-jim-cramer-says\/","title":{"rendered":"Charts suggest the S&P 500 is set up for a year-end Santa rally, Jim Cramer says"},"content":{"rendered":"
Charts suggest the stage is getting set for a year-end rally in the S&P 500, CNBC's Jim Cramer said Wednesday, leaning on analysis from technician Mark Sebastian.<\/p>\n
"The charts, as interpreted by Mark Sebastian, have been a pretty darn good guide to the last few weeks, and right now they're making him feel bullish about the S&P 500 through the end of the year," the "Mad Money" host said. "I think I agree with him."<\/p>\n
Sebastian \u2014 founder of OptionPit.com and CIO at the hedge fund Karman Line Capital \u2014 is particularly encouraged by the trading patterns in the CBOE Volatility Index, Cramer said. Considered Wall Street's fear gauge, the VIX has been falling rapidly after spiking higher in late November and early December.<\/p>\n
"Even when the S&P's flat on a day like today, the VIX keeps going down rapidly. That tells [Sebastian] that traders are getting rid of their crash insurance," Cramer said, noting the VIX is really a measure of implied volatility for S&P 500 options contracts.<\/p>\n
"Lots of money managers like to use options to hedge their positions and right now, the VIX is saying that they keep climbing out of their foxholes" after a turbulent period for stocks, Cramer said.<\/p>\n
The market's recent weakness wasn't necessarily a surprise to Sebastian, Cramer said, because the technician observed a worrisome trend in the VIX and S&P 500. Starting in late October, Sebastian saw the VIX begin a slow climb higher throughout November at the same time the S&P 500 marched upward, Cramer explained.<\/p>\n
"When the fear gauge rises along with stock prices, it tells you stocks could be due for a beating," Cramer said.<\/p>\n
However, Cramer said Sebastian likes what he sees in both the S&P 500 and VIX, expecting there to be additional trading days like Wednesday, when the VIX fell 9% and the S&P advanced about 0.3% in a somewhat choppy move to close at 4,701.21<\/p>\n
"And as long as the VIX keeps falling, he thinks that sets us up for … that Santa Claus rally I keep talking about," Cramer said. "That should happen later this month, and it could send the S&P soaring from around 4,700 now to possibly as high as 5,000," Cramer said.<\/p>\n
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