“The charts, as interpreted by Mark Sebastian, suggest that the S&P 500 is headed higher … and the negative trends I pointed out at the top of the show — at least some of them — shouldn’t lead to anything too frightening,” the “Mad Money” host said.
Sebastian, the founder of OptionPit.com and Cramer’s colleague at RealMoney.com, came to the conclusion after plotting moves in the S&P 500 and the Cboe Volatility Index (VIX).
“If you’re worried that the VIX is headed higher and therefore the market’s inevitably [headed lower], Sebastian says, ‘hold your horses,’” Cramer said.
CNBC’s Jim Cramer said Wednesday that he is seeing signs that the securities exchange could be prepared to withdraw from it’s anything but, a believed unpredictability master is proposing something else.
“The charts, as interpreted by Mark Sebastian, suggest that the S&P 500 is headed higher … and the negative trends I pointed out at the top of the show — at least some of them — shouldn’t lead to anything too frightening,” the “Mad Money” host said.
Sebastian, the author of OptionPit.com and Cramer’s partner at RealMoney.com, arrived at the resolution subsequent to plotting moves in the S&P 500 and the Cboe Volatility Index (VIX), otherwise called the market’s “fear gauge.”
The VIX on Tuesday leaped to just shy of 18 in intraday exchanging prior to pulling back to 16.44. In the mean time, the S&P 500 dropped practically 1% late morning Tuesday prior to tearing back the greater part of its misfortunes by the nearby. On Wednesday, the S&P 500 posted a new record, while the VIX lost some ground.
The VIX and the market generally run in inverse ways. At the point when stocks climb, the dread measure will in general fall. At the point when the two lists go a similar way, nonetheless, it’s anything but a decrease in stock costs is not too far off.
“If you’re worried that the VIX is headed higher and therefore the market’s inevitably [headed lower], Sebastian says, ‘hold your horses,’” Cramer said. “Sebastian points out that the volatility index has been in a huge downtrend, making consistently lower lows and lower highs while the stock market’s roared.”
“Yesterday showed us that the VIX can give us a quick, violent move higher when the market sells off, so there’s some fear lurking, but that fear vanishes when stocks go up,” Cramer said. “For now, Sebastian says that’s what really matters.”
Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Fast Amplify journalist was involved in the writing and production of this article.
