Cramer's most trusted market indicator says to start buying stocks

• CNBC's Jim Cramer said Wednesday it's time to buy stocks despite the bearish signal emanating from U.S. Treasurys as coronavirus fears persist. 
• The "Mad Money" host said the MarketEdge Short Range Oscillator is informing his call to buy. 
• "I expect a mild recession based on weakness in travel and entertainment, but right now the oscillator is saying you should buy stocks, both short and long term," Cramer said. 

CNBC's Jim Cramer said Wednesday it's time to buy stocks despite the bearish signal emanating from U.S. Treasurys as coronavirus fears persist. 

The "Mad Money" host said pointed to a trusted market indicator as evidence for his bullish call: the MarketEdge Short Range Oscillator. 

"I expect a mild recession based on weakness in travel and entertainment, but right now the oscillator is saying you should buy stocks, both short and long term," Cramer said. 

Cramer said he has relied on the proprietary indicator, which measures buying and selling pressure in the market, for his entire career. He said it lets investors know "when the selling may have gotten ahead of itself." 

When it goes above a reading of five, it means it's time to sell, Cramer said. When it goes below negative five, it's time to buy. Recently, it went below negative 12 and "that's almost always a great time to buy," Cramer said. 

Previous instances of that occurrence include after 9/11, during the debt-ceiling crisis on Aug. 11, 2011, and China's 2015 stock market crisis. It also happened near the end of 2018 as the Federal Reserve started to tighten fiscal policy, Cramer said. 

"Each time was a marvelous moment to buy stocks. Each time, stocks were overreacting to some news that turned out to be not as serious as Wall Street believed," Cramer said. "Sure, things were bad, but they weren't that bad ... and these things were all solved."

Cramer said there was only one instance when the indicator went below negative 12 and it proved to be a bad time to buy: the 2008 financial crisis. 

But the current market conditions have more in common with the four accurate buy calls than the financial crisis, Cramer said. 

"There was no credit crisis. There were no big failures. There was no systemic risk," he said. "The one time we failed to bounce, we had all those problems." 

Cramer's comments Wednesday follow a strong day for U.S. equities as Wall Street reacted to former Vice President Joe Biden's strong showing Tuesday night in the Democratic primary. 

The Dow Jones Industrial Average rose more than 1,100 points higher for a gain of 4.5%. The S&P 500 gained 4.2% to 3,130.12, while the Nasdaq Composite moved higher by 3.8% to 9,018.09. 

Wednesday was the second time in three days that the 30-stock Dow rose more than 1,000 points. 

Despite the strong performance of equities Wednesday, U.S. Treasurys continue to show "we're not out of the woods," Cramer said. 

The 10-year Treasury yield briefly fell below 1% again Wednesday, after dipping below that threshold for the first time ever on Tuesday after the Federal Reserve's emergency interest rate cut. The 10-year note closed just above 1% on Wednesday. 

Cramer said investors continue to move into safer bonds because of the fear around the coronavirus. 

While Cramer said he does believe there will be near-term economic pain from the outbreak, he added, "I think we'll come out on the other side just fine even with outbreaks closing down commerce all over the country." 

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