Cramer said he agrees with Garner's analysis, and felt that a large hedge fund received a margin call last week, forcing the huge drop in prices seen. He said once the sharks begin circling a failing fund the selling will only intensify, forcing the fallen comrade to liquidate everything.
As for the future of gold prices, Cramer said a similar short squeeze and subsequent 17% rally took place last summer, and the pattern is likely to repeat itself again this summer. He continued to recommend that gold be a part of every investors' portfolio.
Know Your IPO
In the "Know Your IPO" segment, Cramer took a look at four upcoming IPOs to see which ones should get investors excited.
Cramer started off with Seaworld, which is set to come public under the ticker "SEAS" for between $22 an $24 a share. That puts this operator of 11 theme parks on par with the likes of Six Flags (SIX) and Cedar Fair (FUN), but with a few notable exceptions.Cramer said that Seaworld is growing revenue faster than its peers, which is good, but it also has a smaller dividend, at 3%, and more debt. Cramer said investors can either buy into the Seaworld IPO or just buy Cedar Fair with its 6% yield. Next up were two grocery-related IPOs. Safeway (SWY) will be spinning off its gift card division under the ticker "HAWK" between $20 and $22 a share; Cramer said the division is not getting the credit it deserves. He was also bullish on Fairway, the New York-based grocery chain with just 11 locations, although he noted the company in the longer term will be facing stiff competition. Finally, there is HD Supply, a housing-related name Cramer said he also expects to perform well given the strength in the housing market we've seen so far this year.