'The charts, as interpreted by Carley Garner, suggest that the upside in the stock market has gotten more limited,' Jim Cramer says.
Because of this, there is good reason for investors to be more cautious about their portfolio, CNBC'ssaid Tuesday citing technician Carley Garner. The S&P has added more than 650 points, almost a 28% run, since its December lows that came during the market-wide meltdown in the fourth quarter.
One thing that Garner bases her argument on is the correlation between seasonal trends in the S&P 500 and market sentiment. The technician highlighted that the S&P over the past 15 years has often peaked in July and fallen through late August, Cramer said. "People like this market, which is not what we want to see," he said. "You could argue this means that the market has more upside, but Garner's more concerned ... that the fear and greed index has been making lower highs and lower lows, which suggests that the potential upside here is probably limited, at least for the time being."
Furthermore, the relative strength index , a momentum measurement, is nearing the overbought threshold of 70 and the Williams %R oscillator, another momentum indicator, is already in extreme overbought territory at 99, Cramer said.
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