JJC Rewrites 'The Criteria for Bullishness'

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Two weeks ago I posted a checklist for bullishness and I revisited it after last Friday's rally and I want to revisit it again after yesterday's ramp. This list has a lot to do with why I've become much more constructive about the market. So let's go to the next rewrite. (The first rewrite comments are in parentheses; the second rewrite comments are in italic and the current comments are in bold-face.)

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Here we go again with another look at the bottom checklist after another Friday rally. I am keeping the other rewrite in place and attaching this, so you can see the progress we've made. (Was Friday for real? Depends on who you ask. Every interview I read with every mutual fund manager who is down a lot and needs the market higher said that Friday was the bottom. Every manager I know positioned short said Friday was phony. But what else is new? You would think these reporters would eventually get wise and ask, "Don't you need the market to go higher to do better?" But maybe that's not polite.) It went higher. My cynicism for now seems misplaced.

(I'd like to go back to the checklist I wrote last week. I gave 12 things I would like to see happen in this market. Let's see which ones have worked.)

1. A bottom in the financials. The group had a momentary setback this week regarding Argentina, but was then spurred by hopes of a Fed rate cut after light GDP numbers got posted. Still very on pace and checked.

2. Some tech companies report good news followed by a rise in prices. Optical slowed this week. But the regular techs kept going up all week on the earnings from the precious week. That's powerful.

3. Janus stabilizing. Here was a setback because the Janus funds are too dependent on optical and wireless. But Nokia's (NOK:NYSE ADR - news - boards) strength remained all week. Barely checked.

4. Cell phone market heating up. Still think Nokia is the key, but the semiconductors with cell phone exposure cracked late Friday.

5. Telco mergers. This area, with $200 billion in high-yield financing, remains the market's Achilles' heel. Tracking stocks won't help.

6. Oil going under $30. Warm weather is helping but we aren't there yet.

7. A major strategist going bearish. Still haven't gotten this one. We really need this. We need more capitulation.

8. Clear winner in the election. Got a little murkier, but I still think it will be Bush.

9. More bears in the Investors Intelligence Survey. Big breakthrough here, with bulls dropping big. Almost checked.

10. The bull is dead in headlines. Got this already.

11. TV shows about the market losing viewers. Got this already.

12. The collapse of Buzz and Batch. The optical bubble is smashed and that's a huge relief for the market. There are still some overvalued storage names, but they've come down hard, too. I'm now realizing that this collapse may be the most important of the 12. Without the highfliers flying high, the Tokyo-stock-crash fears could be behind us. Don't forget, it is this columnist's view that the stock market was the reason for the six tightenings and if Buzz and Batch get their clock cleaned playing overvalued stocks and don't get more money in or close their doors entirely, then the Fed can ease. And then we have a bottom, no matter what.

Not a great week in that we lost some tech, but we picked up a possible check to number 12. The week, though, certainly increased the odds of a bottom if only because it was the last week of October! I think we're seeing stability in the market's core even as we see punkish action in the highfliers. That's important and noteworthy. A push!

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James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to send comments on his column to James J. Cramer.