Cramer: Plotting the Course Higher

How high can we go? That's pretty much the only question worth asking after you put in a bottom, as we did after the Bear Stearns (BSC Quote) collapse.

Nobody's talking about a new bull market. In fact, Doug Kass sees an swift end to the rally ahead. But let me give you some thoughts about what has happened in the past few weeks to make it so that you could become more positive.

First, we went down so much because the systemic risk in the biggest part of the S&P, the financials, was overwhelming. It is why we "overcorrected" because the market feared -- and shorts pressed their bets -- that the following institutions could go under: Bear Stearns, Washington Mutual (WM Quote), Wachovia (WB Quote) -- yes, Wachovia, because of the miserable buy of what turned out to be a really reckless lender, Golden West -- Lehman Brothers (LEH Quote), Merrill Lynch (MER Quote), Citigroup (C Quote), National City (NCC Quote), Capital One (COF Quote) and even Wells Fargo (WFC Quote). Fannie (FNM Quote) and Freddie (FRE Quote), too.

We also felt that the Fed and Treasury would not be engaged, or might not even care.

Bear changed all of that because the regulation of the banks shifted from the Fed to Treasury, and Bob Steel at the Treasury wasn't going to let the whole shebang go under on his watch, as it very well could have under the Federal Reserve. Steel spoke the language, knew the players. Bernanke knew none of them and was totally reliant on the New York Fed, which had failed repeatedly to create programs that could turn around the situation. The move by Treasury was a total surprise given Hank Paulson's inept handling of the implicit guarantee of agency paper, which of course broke the back of Bear and almost broke the bank of Lehman, as suddenly you needed real collateral for paper that had been considered sacrosanct.

Cramer: Why We're Headed for More Gains

Once you had Bear saved, you knew you had a backstop for all the rest. The fact that we didn't go down, let alone crash, after that Sunday shotgun wedding between Bear and JPMorgan (JPM Quote) was the bottom, and that's what people are grasping.