Why Jim Cramer is Bullish on the Stock Market
Despite a year of craziness and uncertainty, the stock market is on fire. After seeing the Dow drop 38.4% in a matter of five weeks, the market has bounced back with the Dow not far off from its yearly highs.
The craziness of 2020 is far from over, however, and one shockwave of news could send the markets into a tailspin once again.
There are still two major looming questions that could impact markets drastically: who will win the U.S. presidential election and will we ever get a handle on coronavirus?
As for the coronavirus, there may not be much more of a toll it can take on the market. Despite little change in cases and deaths over the past few months, the market has powered through. As soon as local economies opened back up and companies became aggressive in working on a vaccine, the market has responded positively.
The U.S. market has been good, but some foreign markets haven’t been so lucky.
Jim Cramer of CNBC said rising cases should not worry investors, though, as “there will be no lockdown.”
Cramer also discussed the election and the nervousness across Wall Street as November 3 creeps closer.
While Cramer isn’t worried about the election’s outcome and its impact on the market — suggesting that his portfolio may actually be better under Biden, but not that the market as a whole would — he is worried about something else pre-election: a technical pattern in the Dow chart suggesting a downturn.
Using the analysis of Tom DeMark, who’s technical analysis predicted the September selloff, Cramer explained that the Dow may move a bit higher before having another hot selloff. The bottom of that selloff would be around election day.
Assuming this analysis ends up correct, Cramer said that investors should be ready to buy around election day.
While the market may be shaky in the very short-term, Cramer is not phased by coronavirus or the election and thinks the market is in good shape moving forward.
Seeing as though the market has powered through some major uncertainty this year, I would say Cramer is justified in his optimism.