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NEW YORK (
) -- "Temper your enthusiasm," Jim Cramer cautiously advised viewers of his "Mad Money" TV show Wednesday.
He said while today's rally was a short respite from the bears, U.S. economic strength will not trump the global economic fears for long.
"Do not be recklessly bullish," Cramer warned, as he outlined six requirements that must be met before a market rally can be sustainable. The requirements included:
1. Fine print on financial regulations. Cramer said the markets need to see the finalized reform package. He said the market will not tolerate any last-minute additions or changes to the bill.
2. Spanish bank stabilization. Cramer said the Spanish banks desperately need a TARP-style bailout.
3. Lower unemployment. No surprise here. Cramer said the markets needs to see at least some drop in unemployment on Friday or all bets are off.
4. Oil spill resolution. The spill in the Gulf is taking down the entire oil sector, stocks will begin to recover only after the oil stops flowing.
5. Chinese soft landing. Cramer said until there's confirmation that the Chinese government is aiming for a soft landing, we cannot eliminate talk of a bubble in that country.
6. European stabilization. The markets need a stable euro. He said there needs to be no more downgrades of country debt, and no more talk of countries dropping the euro.
Cramer said only when all of these items are checked can the market rally, and can we feel safe to buy into tech, retail, the industrials and the accidental high yielders. Otherwise, he said, "tomorrow is just another selling opportunity."
Don't Miss Top 10 'Buy' Rating Stocks Under $5
In a tough market, investors need to look for survivors, companies with a proven track record, Cramer told viewers. That's why he recommended
, an industrial property REIT yielding 5.6%.
Cramer said EastGroup reminds him of
, a stock he recommended on June 8 for a 53% gain, and
Federal Realty Trust
, which is up 46%.
Cramer said with a strong recovery still evolving in the manufacturing sector, EastGroup is the REIT to own, especially given that it's down 20 points from its high and is just four points off its low. He said management called a bottom in industrial property on its most recent conference call, and that's a big deal.
Cramer recalled how in 1990, amidst the S&L crisis, he shorted all of the banks and REITs at his old hedge fund. However while most stocks did topple, EastGroup stood strong, and by 1991 the stock had nearly doubled.
Cramer said EastGroup is once again caught in the crossfire and will once again prevail. He said the stock is trading at its net asset value, which makes it a great buy under $36 a share. He said of the analysts who cover the stock, only three rate it a buy, leaving lots of room for upgrades.
Truck Stocks Rolling
"The bull market in trucks is just beginning to roll," Cramer told viewers, as he recommended three trucking stocks set to prosper.
Cramer explained that just like in autos, the truck makers have been under producing trucks for the past three years. But now that the recovery is at hand, and demand is rising, the trucking stocks are poised to move dramatically higher.
With the average age of America's trucking fleet at a 20-year high, Cramer said this recovery in trucking will be a multi-year move. Adding to the demand, higher diesel emission standards taking effect around the globe.
is the best of breed stock, offering superior engines and engine related products. The company gets 30% of its profits from Asia, and delivered 75 cents a share in earnings while Wall Street was looking for just 35. Cummins has $1 billion in cash, and trades at just 10 times earnings with a 14% long term growth rate.
is the value play in the group. The company is the fifth largest manufacturer of trucks in the world, and gets 51% of its sales from North America and 35% from Europe. Paccar also beat earnings estimates during its most recent quarter and is 14% off its high with a 11% long-term growth rate.
Finally, Cramer recommended
,which he deemed the most risky of the three. Navistar disappointed when it reported last, but the company did offer positive guidance.
Navistar trades at just 7.7 times its earnings, with a 13% long-term growth rate, showing just how poorly the company has been performing. Cramer said Navistar has the most room to grow given its disappointing performance.
Am I Diversified?
Cramer talked with callers to see if their portfolios have what it takes. The first caller's portfolio included:
Cramer said this portfolio was well played and diversified.
The second caller's top holdings included
Research in Motion
National Oilwell Varco
Cramer said Research in Motion, Microsoft and Symantec were all technology stocks, and he doesn't like any of them. He recommended adding
Cramer was bullish on
Nordic American Tanker
Family Dollar Stores
He was bearish on
99 Cents Only Stores
Don't Miss Top 10 'Buy' Rating Stocks Under $5
-- Written by Scott Rutt in Washington D.C.
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At the time of publication, Cramer was not long any stock mentioned.
Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."
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