“The charts, as Tom DeMark interprets them, suggest that with a little more weakness, this market finally has a legitimate chance to go lower for the first time since it all started running last November. … I hope he’s right, and more importantly, I think he’s right,” he said. The “Mad Money” host said DeMark and his team have a 13-step buying or selling countdown model that helps them find the highs and lows in the market. The trend eventually runs out when there’s a certain number of sessions going in the same direction, he said. He added that the key to finding the bottom is to identify when sellers have run out of steam and everyone who planned to sell already has. To begin his explanation of DeMark’s analysis, Cramer first looked at the daily chart of the Dow Jones Industrial Average. Zoom Icon Arrows pointing out According to DeMark, the Dow reached 13 in the June 17 market countdown, but there is a secondary countdown that is still at 12, Cramer said. “That means the Dow may have bottomed out in the past month or there may be one last downtrend that will take us to a lower low,” he said. According to Cramer, DeMark also believes there are parallels between the Dow’s performance this year and 1973, represented by the blue line on the chart. “It used the same 13-step countdown even then, and it worked just as well as it does now. They think the relationship is remarkable and, if true, we see some more volatile trading for the Dow over the next couple of months, followed by a strong rally in September and October … but then a big decline at the end of the year,” he said. “If DeMark is right, then right now we could see an incredible trade,” he added. For more analysis, watch Cramer’s full explanation video below.
