Charts and history suggest stocks, most commodities could have a strong 2022, says Jim Cramer

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CNBC’s Jim Cramer broke down the technical analysis of Carley Garnerexplaining why the DeCarley Trading co-founder has a positive outlook for a range of asset classes despite the Federal Reserve’s policy tightening.

“Charts and history, as interpreted by Carley Garner, suggest that 2022 could be a strong year for most commodities, the bond market and even the stock market,” said the ‘Mad Money’ host. “.

“Even with the Fed putting the brakes on, they think the momentum of the past two years of money printing will continue to push these asset classes higher, which almost no one else is frankly predicting.”

Garner’s analysis focuses on predicting the impact of the Fed reducing the pace of its monthly bond purchases and then ending them all together later this year. This would mark the end of so-called quantitative easing, which the US central bank launched in 2020 for only the second time. The first came in 2008 in response to the financial crisis; it ended in 2014.

“If history is any guide, Garner suspects we could be in a period similar to 2010 to 2012, when all assets rose in value at some point, sometimes to ridiculous levels. Even with the Fed lifting the foot off the accelerator pedal, Garner thinks it could take another year or maybe two to digest all the cash that has been created since 2020.”

Monthly corn futures price chart for the past 20 years.

Crazy Money with Jim Cramer

For example, Cramer said Garner thinks corn prices could see another rally this year — even though it has fallen from recent highs in May 2021. She expects it to be similar to 2012, when “we had the second round crisis rally.”

For the stock market, in particular, Garner thinks the S&P 500 could decline in the near term, but she doesn’t expect a big drop in stock indexes at this stage of the Fed’s tightening efforts.

Monthly chart of the S&P 500 over the past two decades.

Crazy Money with Jim Cramer

“Remember, when the Fed last started raising rates at the end of 2015, we caught some early volatility, but then the S&P resumed its long upward march,” Cramer said. “Because we already seem to have several rate hikes planned ahead of time, Garner thinks we are heading into a period where bad news for the economy is good news for the stock market, as weak economic data means that the Fed won’t have to raise interest rates as aggressively as we expect.”

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