Here Comes the Rally

I'm going with Doug Kass. He says this rally is different. I say the facts are different. Over and over again I have said I will get more positive when something positive happens and when stocks are low enough that they factor in the worst case.

Last Friday I did this distressed analysis of the Dow, using dividend cuts that no one is thinking about, bagels for all the financials (zero) and a decline in every single Dow stock, and I still couldn't get below 5320. With the market ticking at 6300, let's face it -- that downside is actually fathomable.

I have to admit I did the analysis because I wanted to go with Doug, because his conviction level is so high.

But I needed something besides just sentiment -- which is horrible, as witness the coronation of Roubini. I needed other bears to say "buy" -- I got them in Rick Bensignor and Bert Dohmen, two trusted technicians who had been bearish as all get out. Bert said, "Cover your shorts" on Friday. Rick predicted a rally to start today.

Finally though, I needed some facts. Some darned facts. When Citigroup (C - commentary - Cramer's Take) said they had the best quarter in a couple of years, that was the fact I needed, because if Citi is doing well, Morgan Stanley (MS - commentary - Cramer's Take) and Goldman (GS - commentary - Cramer's Take) are off the charts.

Why does this matter? Because can you imagine what would happen if either company preannounced an upside surprise?

Now, let's layer on one more fact: Two of the most important people in Congress are now calling for a reinstatement of the uptick rule on top of Ben Bernanke calling for forbearance on the banks!

WOW -- DOUG'S GOING TO BE RIGHT with a huge call right here!

At the time of publication, Cramer was long Goldman Sachs and Morgan Stanley.

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Know what you own: Cramer mentions the banks. Companies in the financial industry include Wells Fargo (WFC - commentary - Cramer's Take), Bank of America (BAC - commentary - Cramer's Take), JPMorgan (JPM - commentary - Cramer's Take) and U.S. Bancorp (USB - commentary - Cramer's Take).

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