Cramer's 'Mad Money' Recap: Momentum Fund Fuel

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

---

The real force behind the current rally is the mechanics of the market, Jim Cramer told viewers of his "Mad Money" TV show Monday. That's what has driven the Dow to nearly 12,000, he said.

Contrary to popular belief, the market has not reached this level because of a combination of earnings and interest rates, or because people have just decided to start buying, or because oil has declined, Cramer said.

Although this "tremendous" rally is taking place, nobody is explaining the reasons behind it. Everywhere he goes, Cramer said people have been asking about what changed in the market and how it got to 12,000.

"Understanding the rally is the first step in trying to profit from it," he said.

The one factor that moved us up here is the simple mechanics, or the day-to-day ways in which the market operates. In this particular rally, the mechanics are being driven by one group of buyers: momentum funds, Cramer said.

In fact, the momentum funds are the most positive he's seen in several years.

"For the last five years, momentum funds had lost style, but with the turn in May they started coming back," Cramer said.

Momentum funds, which concentrate on trading off of market trends, "get in the game and take stock up without wasting time," he said. "They don't sit on the sidelines." And now they are back in full force and are "moving the market," Cramer went on to say.