The market started strong with a 130-point surge, Jim Cramer said on his

"RealMoney" radio show Wednesday, as expanding bearish sentiment set stocks up for a bounce.

Traders are in the midst of a rally caused by the fact that there was too much pessimism and too many bears for too long, he said.

Cramer has a few indicators which he uses to measure bears. One such indicator is an oscillator, he said. This measures the buying and selling pressure of the market. When the market is oversold, which it was, it's like a compressed spring and is bound to bounce, he said.

Another indicator Cramer uses is a bull/bear ratio, which is the compilation of all the views of people who write about the market. Lately there has been too much pessimism, which is good for the market, he said.

The fundamentals of the companies in the market are bullish, Cramer said. For example,

FedEx

(FDX) - Get Report

just reported a number that is "beautiful," and it is a "smoking company," he said.

The fact that FedEx is doing well tells Cramer that everything the company touches must also be doing well, such as the retail sector. In addition, as a leading transportation company, FedEx ignites the financial sector as well, he said.

Morgan Stanley

(MS) - Get Report

is a prime financial, according to Cramer.

Image placeholder title

Clarence Otis,

Darden Restaurants'

(DRI) - Get Report

CEO and chairman, was on Cramer's "Mad Money" TV show on Tuesday, and he also reported great numbers for his company.

This tells us that people are still going out to eat despite the high gas prices, Cramer said.

People are being too negative, Cramer said. On Wednesday, Darden is up 2 points, Morgan Stanley is up 2.5 points, and FedEx is up 5 points. "This is encouraging," he said.

Talking Cheap

There are a lot of companies in the market that are fitting the description of cheap, affordable or inexpensive, said Cramer.

There are businesses that are doing everything right, but their stocks are getting hammered, Cramer said. More companies are down than he's seen in ages he said.

For example,

Johnson & Johnson

(JNJ) - Get Report

is one of the most established businesses in the market.

It has no pressure from the Food and Drug Administration, it is not involved in any scandal, and it has smooth earnings and a great management, Cramer said. Yet, the company's stock is going nowhere despite the fact that it's cheap, he said.

Cramer said he sold half of his position in

Microsoft

(MSFT) - Get Report

, which he owns for his charitable trust,

Action Alerts PLUS, when the stock was at $26, but he had to keep the other half because of restrictions.

The company has a virtual monopoly on its market, Cramer said, adding that it is not dangerous to get into Microsoft now and wait for six months for the stock to increase.

It's not the time to sell it now, Cramer said. There is a gigantic cycle ahead for this company.

In addition,

Bear Stearns

(BSC)

,

Goldman Sachs

(GS) - Get Report

and

Lehman Brothers

(LEH)

are selling at half the price they used to, Cramer said.

These companies are in growth mode for many years to come, he said. People need to get rid of the misconceptions they may have about investment banks, Cramer emphasized.

Investment banks are not the same as online brokerages. Bear Stearns makes its money from of mortgage packaging and selling, and Goldman Sachs makes a fortune from of commodities trading, he said.

The market is in a feel-good mode right now. But where is all the cash coming to move this market? Cramer asked.

On May 11, cash was king, and investors were reacting to macro-forces, he said. Cash was more valuable than stocks. Right now, cash is going up on every level.

There are 23 separate equity funds that have raised billions, and hedge funds are sitting in cash, Cramer said.

Cash cannot stay on sidelines forever. People need to start picking away if they haven't bought stocks yet, he said.

Cramer's Callers

Although there were trade rumors that

Motorola

(MOT)

was having trouble selling its low-end products, Cramer believes it will make its quarter.

It is a high-quality cell phone company that is growing at 12%, Cramer said, adding that he would double down and buy the stock.

Cramer told a caller not to worry about

MasterCard's

(MA) - Get Report

lawsuits. It is an undervalued company, which should be selling at $50 to $55, he said.

EarthLink

(ELNK)

is too cheap, Cramer said. The company has an old business and is using its cash to fund new businesses. At $8 Cramer recommended buying some of the stock.

There will be no rally for

Xerox

(XRX) - Get Report

Cramer told a caller, because Cramer doesn't believe that the stock will do anything as long as Anne Mulcahy is there.

Cramer said he pushed

Garmin

(GRMN) - Get Report

, the largest global positioning company, hard 10 days ago.

Now the company is 4 points from its high, Cramer said. People shouldn't jump into it right here, he advised. But it is a great company, he said, and gave it two thumbs up.

When a caller asked about

Joy Global

(JOYG)

, a mining equipment company, Cramer said the sector is on fire because there are so many places being mined right now because of the commodities shortage.

Although Cramer said he doesn't mind the stock, he didn't give it raves because the company failed to deliver on its promise last quarter. He said he would have to wait until next quarter.

Cramer told a caller that he prefers

Hewlett-Packard

(HPQ) - Get Report

to

Dell

(DELL) - Get Report

.

Dell is expensive and only has a PC business; Hewlett is cheap and has both a PC and printer business, he said.

Cramer called

Exxon

(XOM) - Get Report

one dog of a stock and recommended

Occidental Petroleum

(OXY) - Get Report

instead.

He believes that

Bed Bath & Beyond

(BBBY) - Get Report

will report a good quarter and told a separate caller to avoid

IBM

(IBM) - Get Report

as he does not see enough growth there.

At the time of publication, Cramer was long Microsoft.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for

Action Alerts PLUS. Listen to Cramer's RealMoney Radio show on your computer; just click

here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click

here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click

here to get his second book, "You Got Screwed!" and click

here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by

clicking here.

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