Investing Club: This one chart shows why investors should be more bullish on the market

Published Mon, Feb 14 20222:33 PM EST

Kevin Stankiewicz @in/kevinstankiewicz @kevin_stank

It may be time to get more bullish on the stock market, according to one of the Investing Club's favorite technical analysts. Larry Williams — the longtime technician and market historian, who has made a number of prescient calls during the Covid pandemic — sent CNBC's Jim Cramer a fresh piece of analysis that caught our attention. Here's the chart, which we also discussed on Monday during the Club's "Morning Meeting." ( Watch it here on-demand .) The chart shows moves for the Dow Jones Industrial Average (in white) along with 18-week timing cycles (in blue), which can signal moments when current trends may reverse. As seen on the chart, we're at the trough of an 18-week cycle — and at times over the past two years, that's been followed by decent moves higher. Williams' work suggests the Dow may be in for a rally that sustains until late April. We think Williams' positive outlook is a bit of a contrarian view at a time when Wall Street is worried about escalating tensions between Russia and Ukraine, as well as the potential for a more aggressive approach to tightening monetary policy from the Federal Reserve to fight surging inflation. The market now expects seven rate increase this year, starting next month. Cramer's thoughts Cramer likes to turn to technicals during times of high emotions and uncertainty because they take personal feelings out of the situation in favor of a more empirical approach. In this case, Cramer believes it's important to think through a few hypothetical scenarios that could support Williams' call. Concerns that Russia may invade Ukraine represent a sizable uncertainty factor in the markets, but the Club believes a diplomatic resolution would help back Williams' view of a Dow rally until late April. On Monday, the Kremlin signaled a readiness to keep talking with the West about how to diffuse the Ukraine crisis. Another primary concern is about the Fed, as the president of the central bank's St. Louis branch, James Bullard, has made a series of more hawkish comments in recent days. Bullard, a voting member of the Fed's policymaking arm, repeated his case for the Fed to rapidly raise rates in an interview on CNBC before Monday's opening bell. During Monday's "Morning Meeting," Cramer explained what a favorable outcome to Fed fears could look like: "We all get comfortable with what Bullard is saying, and it makes it so that everyday we come in, we don't fret about what the Fed is going to do." Putting cash to work Let's step back a moment and remember that the Club raised some cash in stocks that he