This article was originally published March 10.
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Jim Cramer told the viewers of his "Mad Money" TV Show Tuesday that he knows all of the ingredients that made up today's big market move. Not only that, he said, the move isn't over yet!
Cramer said the ingredients for today's huge market move were simple. First, he said, start with a gallon of bears.
He said the rally started cooking when noted forecaster Nouriel Roubini predicted a Dow 5,000, while banking analyst Meredith Whitney signaled even more trouble to come at the financials, both on the same day.
"This is what happens at the bottom," said Cramer. The sentiment gets so bad that people get carried away. Then add Moody's "Deathwatch List" and you can almost smell the rally cooking.
Next, Cramer said the markets needed a few sprinkles of positive news, like Rep. Barney Frank (D., Mass) stating that the uptick rule could be reinstated in a month and make the markets safe for capitalism.
Finally, Cramer said the markets needed three big bits of positive news. First,
said it sees improvements in 3G cell phone inventories. Second, oil appears to be stuck in the $40s and not headed into the $30s. And third,
Chairman Ben Bernanke said he favors lightening the mark-to-market rules that have been crippling the banks.
With all of these ingredients in place, Cramer said the markets couldn't help but rally. Cramer's on record saying that he'd change his mind on the markets when the facts change, he said they have.
"This is one fantastic rally," he said, "that's not over yet."
Off the Charts
In this segment, Cramer examined the charts of
Bank Of America
and the S&P500 average to see if technical analysis can tell us where the market is headed.
Using highly technical demark models, Cramer said the chart of Bank of America is signaling the downward trend may be over. According to analysis done by DeMark experts, shares could rebound into double digits, doubling in value from their current levels.
The trendline for the S&P500 is similar, said Cramer, with DeMark models signaling a return to the 700s is possible. But, he said, there's a catch.
Cramer said it's clear that the markets are in the hands of the banks and the banks are in the hands of Washington. So if the uptick rule is reinstated, and mark- to-market rules loosened, there could indeed be a big move in Bank of America, as well as in the broader markets. But if Treasury Secretary Tim Geithner and Fed Chair Ben Bernanke disappoint, so will the markets.
"Everything rides on Washington," said Cramer.
One Sweet Stock
Investors looking for consistent results, and even an upside surprise, need to take a closer look at
, said Cramer.
"I'm not interested in the takeover rumors," said Cramer. The story at Hershey, he said, is all about the fundamentals. Chocolates and candies, he explained, is a recession-resistant business and one that doesn't suffer from the pressures of private labels.
In addition, Hershey is taking control of its own destiny by taking not only market share but also full advantage of lower raw material costs. The company also plans on taking advantage of lower advertising costs by increasing its ad spending by 20% this year.
Cramer said Hershey is "getting serious" about its bottom line, with retail sales up 5% in the most recent quarter, contributing to an upside surprise of 5 cents a share. The company has also just successfull pushed through a price increase, further bolstering the company's earnings potential.
With its stock trading just off its 52-week low, Hershey is cheap with room to run.
Cramer told a viewer that he would not recommend
, but noted that it's got some positive things going for it and investors should keep an eye on it.
Cramer told a second viewer that while he's a fan of
CEO John Chambers, he's not a fan of the company's buyback program. He told another viewer that he's not a fan of
and won't recommend any auto company given how much risk is involved.
Finally, Cramer told a viewer that every portfolio needs to include some gold to protect itself against inflation.
Cramer was bullish on
He was bearish on
Goodyear Tire & Rubber
Las Vegas Sands
Chicago Bridge & Iron
MDU Resources Group
Bank of New York Mellon
Check out the latest edition of
"Cramer's Take onTop-Searched Stocks" on Stockpickr.
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At the time of publication, Cramer was not long on any stock.
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