Cramer explains how to spot ‘exquisite moments’ like Friday’s session

CNBC Jim Cramer reviewed Friday’s market action, dubbing the session an “exquisite moment”, where stocks opened weak, but the averages have picked up since the end. While he said that this particular moment has come and gone, he listed ways that investors can recognize one in the future, saying that these conditions can yield great gains.

“We call days like today ‘exquisite moments’. These are moments that bears overcome, because they don’t know when to quit,” he said. “We had one this morning.”

After a difficult week on Wall Street – the Dow Jones Industrial Average dropped 1,100 points in a single session and posted its longest losing streak in nearly 50 years – the index bounced on friday The 30-stock Dow gained 1.18% to close the week while the S&P 500 went up 1.09% and the Nasdaq Composite added 1.03%.

These “exquisite moments” are when the market is oversold, according to Cramer. To discern market conditions, he said he uses MarketEdge’s S&P oscillator, which shows when there is too much buying or selling. Cramer added that these “exquisite moments” appear when bearish investors show “overconfidence,” saying that Friday saw key stocks such as Palantir, Apple and Nvidia decrease at the beginning of the session without a clear reason.

Investors should also look at positive data on the economy when the market is oversold, Cramer continued. It suggested that part of Friday’s rising stock was due to fresher figures from the personal consumption expenditure price indexa key metric for the Federal Reserve. Finally, he said, the news that contrasts a catalyst for the decline is also something to watch. Investors rallied after the Fed indicated it would make fewer rate cuts next year than expected. But on Friday, a Fed official said he was encouraged by the PCE report and said rates could still fall, although the central bank remains cautious.

“It was, really, an exquisite moment this morning,” Cramer said. “They don’t come that often. But when they do, you have no choice but to jump.”

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Disclaimer The CNBC Investing Club Charitable Trust owns shares of Nvidia and Apple.