CNBC’s Jim Cramer advises investors looking for entry and exit points to keep an eye on both stock and cryptocurrency trading in the coming weeks.
The “Mad Money” host on Friday underwent chart analysis from Tom DeMark, the founder and head of DeMark Analytics.
“The charts, as interpreted by Tom DeMark, suggest that bitcoin may take another month to bottom, while the S&P 500 may peak as soon as next week,”
DeMark invented the DeMark Indicator, which some traders use to time the market. The method, which follows patterns of projecting when a trend can change course, is popular with crypto traders to spot highs and lows, Cramer said.
Cramer reviewed the daily card trade for bitcoin, which peaked at around $ 65,000 in mid-April. The digital currency is now trading above $ 37,300 from Friday after falling to $ 30,000 in mid-May.
DeMark, who said the fall in bitcoin was similar to the 1987 crash, expected the fall to bring the value of tokens to a floor of $ 32,000 – or $ 24,000 at worst. He now believes bitcoin will generally stay above the May 19 low, Cramer said.
In what is known as “Black Monday”, the Dow Jones Industrial Average fell more than 20% on October 19, 1987. It was bookend for a 36% drop in the blue-chip index from August of that year.
“If DeMark is right, you can get a chance to buy bitcoin in the not-too-distant future, and I can take that,” Cramer said. “I think this ’87 analogy is good news. After the crash of ’87, the stock market quickly bounced back.”
As for the S&P 500, which closed with a record for the second straight day, the DeMark indicator suggests the index may be close to a peak, Cramer said. DeMark has price targets of $ 4,335 and $ 4,344, approx. 2% higher than Friday’s finish.