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Cramer's 'Mad Money' Recap: Why This 420-Point Rally Is Different

TheStreet.com Staff

03/18/08 - 07:44 PM EDT

Click here for an archive of Cramer's "Mad Money" recaps.

This huge oversold market may have finally hit bottom, Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

"Last Tuesday's rally was not the bottom of this market," he said, "but today's rally was." Cramer cited several reasons why he now feels the markets has finally reached a sustainable bottom.

  • First, there was a significant change in attitude in Treasury Secretary Henry Paulson's comments Tuesday when he said his agency is prepared to do whatever it takes to turn the economy around.

    Cramer: NYX Buyback Means Bottom Is Near

  • Mortgage bonds traded higher Tuesday. "These low rates will signal re-fi madness," he said.

  • The fabulous numbers posted by both Goldman Sachs GS, a stock which he owns for his charitable trust Action Alerts PLUS, and Lehman Brothers LEH signal that not all financial stocks are damaged.

  • There's now a president dealing with banks and brokerages that go under, and that people needn't be worried about losing their life savings.

  • Stocks such as Nucor NUE and CSX CSX, which both hit 52-week highs Tuesday, signaling the economy isn't as bad as is being reported.

  • Momentum names like Intuitive Surgical ISRG, First Solar FSLR, Google GOOG and Apple AAPL are showing signs of life for the first time this year. Cramer reiterated a buy on Apple.

  • The markets will bottom in part to the VISA IPO, which was priced at $44 a share Tuesday evening. He anticipates the IPO will prove lucrative for those able to get in and will instill some confidence back into the market.

  • The market has bottomed because the market rallied despite Federal Reserve Chairman Ben Bernanke's disappointing rate cut.

    Glass Bottle Boom

    "We love niche bull markets," Cramer told viewers. That's why he recommends glass-bottle maker Owens-Illinois OI, as a stock that's in bull market mode, but one that no one knows about.

    Cramer said the catalyst for Owens-Illinois is simply a shortage of glass. Owens should be able to raise prices for its glass products because of the supply of glass should remain tight until 2010, according to recent reports.

    A recent analyst report by Goldman Sachs predicted a 6% to 7% price increase for 2008, a number that Cramer said will trickle to Owens' bottom line.

    The company recently reported blowout earnings numbers, beating Wall Street estimates by almost double. Owens reported earnings of $1 a share, when the street was only expecting 44 cents a share.

    Cramer also noted the company's strong foreign sales, which accounts for 70% of the company's revenue, are growing at 17% a year compared to only 8% domestically.

    Cramer said Owens-Illinois is also beginning to once again manufacture glass baby bottles, something concerned parents have been clamoring for amongst fears of toxic-laden plastic bottles.

    Cramer said Owns-Illinois stock could rise to $61 a share.

    A Brilliant Move

    Cramer once again applauded Jamie Dimon, president and CEO of JP Morgan Chase JPM, for what Cramer called his "brilliance" in acquiring Bear Stearns BSC at a bargain basement price with help from the Federal Reserve.

    While Cramer was in awe with just about every aspect of Dimon's acquisition, he especially remarked on the patience and experience of Morgan's management team. Not only did JPMorgan have a strong balance sheet ready for such a bold move, Dimon also has the patience to wait for a large bank or brokerage to go belly up before striking, he said.

    "I cannot stress enough how good this is for JP Morgan," said Cramer. While Bear was clearly in trouble with its mortgage and bond operations, Cramer sees many of the firms business units as diamonds in the rough, just waiting for JPMorgan to capitalize on them.

    "Not only that, but JP Morgan gets a new headquarters to boot," Cramer noted.

    Mad Mail

    Cramer told a viewer that he feels Wells Fargo WFC, US Bancorp USB and Goldman Sachs GS are all in a position to take over the next failing bank or brokerage.

    He told a second viewer that Starbucks SBUX will be at least an 18-month turnaround situation and that he still doesn't see a bottom in Hershey's HSY.

    Sudden Death

    Cramer was bearish on Amedisys AMED and EMCORE EMKR.

    Lightning Round

    In the Lightning Round, Cramer was bullish on Goldman Sachs GS, Foster Wheeler FWLT, Hudson City Bancorp HCBK, FMC Technologies FTI, GlaxoSmithKline GSK, Schering-Plough SGP, US Bancorp USB, Wells Fargo WFC, Research In Motion RIMM, Apple AAPL, Frontline FRO and Freeport-McMoRan FCX.

    Cramer was bearish on Merrill Lynch MER, Fluor FLR, Penn National Gaming PENN, MBIA MBI, Flotek Industries FTK, Ford Motor F, Dryships DRYS, Cornell Companies CRN, Crocs CROX, American Apparel APP, Southern Peru Copper PCU and Wachovia WB.

    Want more Cramer? Check out Jim's rules and commandments for investing by clicking here.

    For more of Cramer's insights during the Lightning Round, click here.