Here’s our Club Mailbag email [email protected] — so you send your questions directly to Jim Cramer and his team of analysts. We can’t offer personal investing advice. We will only consider more general questions about the investment process or stocks in the portfolio or related industries. What’s the difference between the Oscillator and fair value for the market? Also, where can I access data on S & P 500’s operating earnings estimates and what is the range of earnings multiple you recommend? I’ve noticed that CNBC analyst guests mention a range from 16 to 22 times, but I find this range a bit wide. Best wishes, Vivian J. Great questions. Let’s start with the first one and differentiate between overbought and overvalued and oversold or undervalued. Overbought and oversold The S & P Short Range Oscillator , which Jim Cramer has used for decades dating back to his Wall Street days, is what’s known as a momentum indicator. It does not account for the valuation of the S & P 500, only the speed and magnitude of a market move in a given direction. When stocks move up quickly, the Oscillator increases, with a 4% and above reading signaling an overbought condition. A minus 4% and below indicates oversold conditions. Zero is neutral and a move up toward 4% or down toward minus 4% provides an idea of where the market is leaning. Get the Oscillator Every time we mention the Oscillator, we’re flooded with requests from Club members: “How can we access?” Well, we went directly to the source, our partners at MarketEdge, the data provider that publishes the Oscillator. We’re excited to share that Club members can now get an exclusive discount for this helpful tool. Click here . For individual stocks, traders often look at the Relative Strength Indicator, which is also a momentum gauge. For this tool, 70 is the threshold at which a stock is considered overbought, while 30 is the downside threshold used to indicate an oversold condition. Last month, we answered…
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