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NEW YORK (TheStreet) -- The short-sellers overplayed their hands last week, Jim Cramer told his "Mad Money" TV show viewers Monday after a surprise rally on Wall Street. Cramer said after overdoing things to the downside last week, there was simply no reason to be short the market this week.
Cramer explained that hedge fund managers had a lot to be negative about last week, including momentum stocks like Amazon.com (AMZN) cooling and"frothy" stocks like Plug Power (PLUG) and FuelCell Energy (FCEL) imploding.
Then there were the overseas worries, including the growing crisis in Ukraine and the continued slowdown in China. Cramer said fears are always racheted up when they're from overseas because investors simply cannot know exactly what's going on from moment to moment.
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But despite investors expecting the worst from Ukraine over the weekend, they were met instead with a "ho-hum" response when trading began Monday. That's what led to today's rally, said Cramer. The worst was already priced into the markets, meaning up was the only direction left to go.
Know Your IPO
In his "Know Your IPO" segment Cramer highlighted three upcoming cloud IPOs he said should following in the tradition of other red-hot IPOs, like last week's debut of Castlight Health (CSLT), which soared 148%.
Cramer said that Paylocity, which will trading under the ticker "PCTY," is a cloud-based payroll processor taking share from traditional vendors. Paylocity should be trading at six times sales when it comes public, which would put it at a discount to the seven times sales of its peers.
Another exciting deal is Globoforce, which will trade as "THNX." This company provides a cloud-based social network for employees that helps improve morale and lessen churn. Globoforce expects to price between $16 and $18 a share.