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NEW YORK ( TheStreet) -- Today's relief rally in the markets is a good start, Jim Cramer said Tuesday on Mad Money, but for the rally to continue there are a bunch of things that have to go the bulls' way.
Cramer explained that the markets have been pushed lower buy the pending Alibaba initial public offering, which forced big money managers to liquidate some of their holdings to make room for this fast-growing Chinese Internet play. But now that fund managers are ready for action, the markets can rebound -- but only if a few other things go right.
Cramer said that the markets first need to hear from the Federal Reserve. The market needs to hear language that the central bankers are flexible, basing their interest rate decisions on data and not on a rigid timeline. If the markets know the Fed has their back, the rally can continue.
The markets also need the Alibaba IPO to go off without a hitch. Cramer said if shares see more than a modest rally the fearmongers will be out in force, likening the deal to the dot-com bust of 2001.
Next, the markets need to see the European Central Bank's bond buying program to stabilize the euro and stop the U.S. dollar's strengthening. The markets could also benefit from oil prices stabilizing, Cramer said.
Finally, the markets need companies to keep doing what they've been doing, which is rewarding shareholders with acquisitions, breakups, dividends and buybacks.
If just some of these can happen, the rally will continue, Cramer concluded. If not, then we could be in for a rocky ride.
Tips From Beyond the Business Pages
Sometimes the best investment ideas come from the strangest of places, Cramer told viewers. That's why investors need to read a lot more than just the business pages.
Case in point: the Sept 15 issue of The New Yorker featured an article entitled "The Transformation" that detailed the promise of controlling cancer without killing it.
Cramer said this article explored the exciting new treatments currently under development at Agios Pharmaceuticals (AGIO) , which rather than targeting and killing cancer directly merely changes its metabolism, rendering it harmless.
Cramer cautioned that Agios' drug, AG-120, is only in Phase I testing and has only been administered to a few dozen patients. But the results so far have been staggering, which makes Agios a continued buy.
Cramer first recommended Agios after its July 2013 IPO, and he continues to like the company's research and its partnership with Celgene (CELG) , which owns 11.6% of the company.
With drugs still years away, Cramer said Agios trades on news and catalysts and not on any traditional metrics such as earnings. But with those caveats in mind, the company shows a lot of promise.
Off the Charts
In the "Off The Charts" segment, Cramer went head to head with colleague Carolyn Boroden over the charts of Apple (AAPL) , a stock Cramer owns for his charitable trust, Action Alerts PLUS, and Amazon.com (AMZN) , two stocks that have been beaten down in the wake of Alibaba.
Looking at a daily chart of Apple, Boroden said Apple hit a pivotal low last week at $96 a share. As long as the stock stays above that key level, she felt that shares could continue rallying to between $113 and $128 a share, as her Fibonacci ratios for both price and duration have been right on target. Investors who listened to Boroden's last recommendation of Apple are already up 32%.
However, Boroden felt Amazon was a different story, with her Fibonacci ratios noting a wall of resistance between $349 and $352 a share, a level the stock has failed to breach twice. Boroden also noted that Amazon now trades below its 50-day and 200-day moving averages, both bearish signs.
Cramer said he's long been on record as recommending Apple for the long term. As for Amazon, he said the stock has been sold to make room for Alibaba, so why not just own Alibaba, which has a faster growth rate?
Executive Decision: Todd Davis
For his "Executive Decision" segment, Cramer sat down with Todd Davis, chairman and CEO of LifeLock (LOCK) , a company trying to help consumers stay one step ahead of the data breaches that seem to have become a weekly occurrence.
Davis said consumers' data are out there and no security will ever be 100% foolproof. That's why LifeLock helps its 3.4 million customers by monitoring their accounts and telling them what they need to do in the event they get a notice that their information has been compromised.
Davis said that having your credit card information stolen is one thing, but consumers may not think about what happens if that information leads to their checking, savings or even their investment accounts also getting breached. That's why LifeLock covers its subscribers for up to $1 million in losses.
No Huddle Offense
In his "No Huddle Offense" segment, Cramer said the world is slowing and investors need to pay attention.
Cramer said with all eyes on China for its Alibaba IPO, it seems that most investors are losing sight of the fact that the rest of China may indeed be slowing. As for Europe, everything from autos to aerospace to chemicals is being impacted from the slowdown there, which could possible get a lot worse if Russia limits its natural gas.
The emerging markets aren't much better, Cramer concluded, which is why investors would be prudent to lighten up on their industrial stocks.
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-- Written by Scott Rutt in Washington, D.C.
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