Cramer's 'Mad Money' Recap for July 21

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Jim Cramer credited SEC Chairman Christopher Cox with single-handedly saving the entire financial sector.

Cramer told viewers of his "Mad Money" TV show on Monday that last week's announcement by Cox that short-sellers must borrow stock before being allowed to execute their trade was exactly what the financial stocks needed to be protected from the endless onslaught from short sellers. "These stocks have been held down artificially by shorts and rumors," he said.

By enforcing the rules that were already on the books, the financial stocks were driven up by short covering, and are being kept up by good earnings. "The move levels the playing field between the longs and the short," said Cramer.

He encouraged Cox to extend the enforcement of the rules to all stocks.

Cramer again advocated the reinstatement of the uptick rule, which requires short sellers to wait for a rise in a stock's price before allowing them to sell and take the price lower. By requiring buyers to be present and before a short can occur, short sellers would lose the ability to endlessly take a stock lower, he said.

Those oppose to the uptick rule contend that with bid and ask prices now just pennies apart, the uptick rule is irrelevant. They also contend that the prevalence of Exchange Traded Funds also makes the uptick no longer necessary.

But Cramer argued the contrary, stating that even an uptick of a few pennies can help protect stocks from countless short-sellers.

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