Charts suggest the stock market is nearing a near-term high, Cramer says

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CNBC’s Jim Cramer said Tuesday’s technical analysis suggested the stock market could be near a near-term high.

“The charts, interpreted by the legendary Tom DeMark, indicate that the market is approaching a high, especially the S&P 500 and the Nasdaq 100. He’s also not that keen on the Dow Jones Industrial Average,” the “Mad Money” Host said.

The breakdown of DeMark’s analysis comes a day after Cramer looked at the charts from another trusted technician, Larry Williams, who also predicted a “tough month” for the S&P 500.

Cramer said that DeMark will hit a near-term high for an index if it hits its target price models while its timing countdown is showing a sell signal.

“So far, DeMark’s models just don’t match when it comes to time and price. So instead of one big top that leads to a brutal decline, we get those setbacks in the garden strains, maybe 5 to 10% or less, and then the rally starts again. But now it’s different, “said Cramer.” Now DeMark’s timing and pricing models are finally in line and he believes we could see significant highs in both the S&P 500 and the Nasdaq 100 soon. “

Here are two charts using DeMark’s analysis, the first being from the S&P 500.

The second is the Invesco QQQ Trust, a popular ETF mirroring the tech-heavy Nasdaq 100.

Both the S&P 500 and QQQ are on day 12 of DeMarks’ well-known 13-session sequential pattern, according to Cramer.

To hit 13, the S&P 500 must rise above 4,430 intraday and close above 4,419, Cramer said. The meeting ended on Tuesday at 4,423:15.

“That could easily happen tomorrow if the S&P recovers so easily in the morning … and then holds out for the rest of the day,” said Cramer. “It’s a very ominous pattern … Tomorrow is day 13. It’s pretty much a crucial meeting.”

For the QQQ, Cramer said, “This countdown will go to 13 and at that moment it will fire a sell signal … the QQQ closes above 369 – just a few points higher so we’re really close.” The QQQ ended the trading day at 366 on Tuesday , 81.

“If the S&P and the Nasdaq-100 give you these sell signals around the same time, DeMark thinks it could get ugly,” said the Mad Money host. “It’s the first time since the low in March last year that this is a real possibility. Of course, there is a chance that S&P and Nasdaq could give you both a quick two or three day rally in a good time if wrong. News environment, but right now DeMark thinks a meaningful top is far more likely. “

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