Cramer's 'Mad Money' Recap: A Market Driven by Fear (Final)

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"The market's should've been down today," Jim Cramer told the viewers of his "Mad Money" TV show Friday.

After predicting a selloff and telling viewers to take profits on Thursday, Cramer told viewers there's a good reason why the markets rallied so unexpectedly.

Cramer said the markets should've been down today after Microsoft (MSFT Quote), Amazon.com (AMZN Quote) and American Express (AXP Quote) all reported disappointing earnings after a huge runup over the past two weeks.

Where did the strength come from? Are companies doing better than we thought?

Cramer said absolutely not. The earnings at Microsoft, Amazon and American Express were horrible, he said. Companies are not healthy, he said, adding they just fire a lot of people in order to make their numbers. He said the market's resilience came from professional money managers.

Cramer explained that professional fund managers are under incredible pressure to both outperform the markets, and each other, and that means being fully invested when the markets are headed higher, like they are now.

If they're not fully invested, he said, managers fall behind the averages and lose their jobs. Thus on weak days like today, there's fear and panic, but not fear that the market's are going down, but rather fear that the market's are going up without them.

Cramer said investors can see the fear by watching the pundits on TV. They were the first to predict doom and gloom today, he said. That's because these fund managers meed the market lower, so they can buy more cheaply, he said. These managers, said Cramer, can't afford to sell, and they can't afford not to buy.