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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.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.