CNBC’s Jim Cramer told investors Wednesday that there are several things that need to happen for the market to have a “bull market within a bear market” situation.
“We’re going to have rolling funds just like we had rolling tops. As long as you know how to identify the signs, you’ll be able to spot them early and determine how aggressive you need to be and how much money you can possibly make,” the “Mad Money” host said.
“As for the broader averages, I’m one of the few people who really believe that we could have a full bull market within a bear market situation, but only if we get some specific signals.” he added.
Stocks fell slightly on Wednesday after gaining the day before, showing market volatility as investors fear a possible recession.
Here is Cramer’s list of indicators that will indicate the long-term recovery of the market:
- Oil prices should stabilize at levels beneficial to producers and the public
- Rampant food inflation must end
- Unemployment rates may need to rise to 5% for a couple of quarters: “That would reduce demand and give us some breathing space in the fight against inflation,” Cramer said.
- Investors should stop engaging in speculative trading
- The advance-decline line needs improvement: “This is a very important indicator that measures the overall breadth of the market: how many stocks are going up and how many are going down. When you see it going up consistently, that’s a strong precursor to a run,” he said.
- Stronger, established companies need to merge with newer, “junk” companies
“You get all this, you’ll see the bears fleeing and interest rates will crash. But without them, the market is still a house of pain,” Cramer said.