The shorts have had their feet held to the fire in several key stocks, and that's powering the overall market, Jim Cramer said on TheStreet.com TV's Wall Street Confidential video Thursday. "It is a tremendous moment for the longs here because they have really caught the shorts with their shorts down," he said. Apple ( AAPL), Genentech ( DNA) and Alcoa ( AA) are three stocks the bears were counting on to "screw up," he told Aaron Task, the host of Wall Street Confidential. However, Apple turned out to be much better than expected, which caused a tremendous short squeeze. And after four consecutive disappointing quarters, Genentech just announced its first "really good" quarter. "It was a labored effort, but they did it," he said. The bears also lost out on Alcoa, which has had a "tremendously horrible start to earnings season for the last three quarters," Cramer said. Plus, Google raised its numbers rather dramatically and Sears ( SHLD), another heavily shorted name, reported better-than-expected numbers. With Apple, Genentech, Alcoa, Google and Sears, which he owns for his charitable trust,
Action Alerts PLUS, Cramer said, "You have literally got five fabulous short positions put on that just went up in smoke." "That's why you're seeing this rally," he continued. "It has nothing to do with the day-to-day fundamentals."
It also has nothing to do with anything that happened in the S&P, "other than the fact that the shorts were using the S&P to create the negativity and then continued to press it," Cramer said. Cramer said if he were working at his hedge fund now, he would "be gunning every single short position as hard as possible." He said he wants to be buying "out-of-the-money calls" wherever the shorts are operating to pressure their positions. "Get the story out that these stocks are better than expected," Cramer advised. "Influence analysts to upgrade or push and then watch the shorts just get crushed." On a separate note, Cramer called Valero's ( VLO) upgrade a "desperate" move by analysts who know the stock tends to bottom around $48 because its buyback gets very strong below $50. If people really want to believe in the Valero story, Cramer urged them to buy ConocoPhillips ( COP) because it has 20% refining margins, which Conoco has preannounced.