Technician Carolyn Boroden made a controversial call last week when she correctly predicted to Cramer that the S&P 500 could have a huge sell-off, followed by a rebound. Sure enough, the charts nailed it and the S&P changed trajectory.
So, where could the S&P be headed now?
Boroden is a technician who runs the website FibonacciQueen.com and a colleague of Cramer’s at RealMoney.com. Her methodology for her predictions is to look at past swings and then run them through a prism of Fibonacci ratios to identify where the stock or index is likely to change trajectory.
“First off, she urges you not to mistake the current strength for a sustainable rally,” the “Mad Money” host said.
Ultimately, there could be anywhere from a 1 to 5 percent upside before the current bounce will run out of steam. Boroden wants investors to be ready for things to turn negative again, perhaps next week.
Read MoreCramer: When the charts say S&P bounce will end
Six months ago Cramer told investors that the railroad stocks were about to go off the rails. Since then, the group has been slammed so hard that Cramer now suspects the torture could finally be coming to an end.
“Some of the railroad stocks are starting to look attractive here, although there is no rush to buy them, and ideally, you should wait for the next marketwide sell-off before you pull the trigger,” the “Mad Money” host said.
Railroad companies have been struggling with both secular and cyclical declines in many of their largest cargo loads, such as coal and oil. During the shale boom, oil producers were willing to ship vast amounts of crude by train because there was not enough pipeline capacity.
“While I am much more positive in the group, there is no reason to buy tons of stock immediately. No forced bottom-calling. You can take your time to leg into these stocks slowly into weakness, using their dividends to tell you exactly when to pull the trigger,” Cramer said.
For example, Cramer suggested building a position when a company has a 3.5 percent yield. For CSX, that would be at $20.57; for Union Pacific, that is at $62.86; and for Norfolk Southern, that is $67.43.
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