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

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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 Quote), a stock which he owns for his charitable trust Action Alerts PLUS, and Lehman Brothers (LEH Quote) 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 Quote) and CSX (CSX Quote), which both hit 52-week highs Tuesday, signaling the economy isn't as bad as is being reported.

Momentum names like Intuitive Surgical (ISRG Quote), First Solar (FSLR Quote), Google (GOOG Quote) and Apple (AAPL Quote) 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 Quote), 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 Quote), for what Cramer called his "brilliance" in acquiring Bear Stearns (BSC Quote) 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 Quote), US Bancorp (USB Quote) and Goldman Sachs (GS Quote) are all in a position to take over the next failing bank or brokerage.

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

Sudden Death

Cramer was bearish on Amedisys (AMED Quote) and EMCORE (EMKR Quote).

Lightning Round

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

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

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