Evidence of a Bottom

Now, we got news this morning that Fannie (FNM - commentary - Cramer's Take) is about to scrap a rule about requiring down payments in hard-hit areas. This is astonishing because it will wipe out a lot of equity for FNM as these are natural defaulters, but it sure helps clear out more inventory.

All of this litany can justify the HGX turn. Against it is unemployment, which is a big if, and the psychology of the consumer, who is once again proving surprisingly resilient.

Yesterday, Bob Marcin issued a note about whether we are in a recession or getting to one. Obviously the bullish litany says we will avoid it. The market is sure saying that.

Either way, the chances that this rally is for real, that the early-cycle plays have some staying power, seems much more destined after this week's action.

Oh, and don't forget, the level of bearishness is rather amazing given the potential turn. That matters too, as hedge funds that are bearish don't go to the sidelines, they place bearish bets, and when those don't turn out right -- as they didn't in retail this week -- the action is pretty explosive to the upside.

Next week we get Lowe's (LOW - commentary - Cramer's Take) and Home Depot (HD - commentary - Cramer's Take) earnings. In some ways these could be the biggest tells of all because they sell products that you use when you nest or when you fix up to sell.

If they have good numbers, the debate could be sealed and the upside made much more clear.

Probably pays to wait after a big up week like this. But the onus, this week, shifted to the bears to make their case, and that's a real tough stand to make after this week's action.

At the time of publication, Cramer had no positions in the stocks mentioned.

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