Short rally has Cramer catching his breath

Cramer's investable bottom markers
Cramer's investable bottom markers   

Though the market didn't bounce back completely on Tuesday, it did at least check off a few boxes on Jim Cramer's market rally checklist. He thinks that this is at least a step in the right direction for the bulls.

The S&P 500 and Nasdaq ended up slightly on Tuesday, finally breaking a three-day string of losses, while the Dow finished lower over concerns on the global economy. The Dow Jones industrial average fell 5.88 points, or 0.04 percent, to 16,315.19, while the S&P 500 gained 2.96 points, or 0.16 percent, to 1,877.7. The Nasdaq Composite added 13.52 points, or 0.32 percent, to 4,227.17.

"I am a huge believer, and I say it every night, that there are always better moments to sell than into panic," Cramer said. That is why Cramer recommends waiting through the bounce, though it was short lived on Tuesday, before selling.

But more than anything, the "Mad Money" host noted that this bounce gives investors a chance to catch their breath and change course.

That's right, do not adjust your screen, Cramer says it's time to do a course correction. There are just too many unresolved issues on his 10 step checklist that need to be resolved in order for the market to have a sustained rally.

But before focusing on what went wrong in Tuesday's market, let's take at a few of the things that went right:

Cramer said in his checklist that investors needed to see good earnings, particularly in the bank and tech sectors. Skyworks Solutions pre-announced a great quarter, which Cramer takes as a good sign as Skyworks dominates cellphone technology, including that of Apple.

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Domino's Pizza also announced a terrific quarter, a positive sign that could indicate consumers are still spending. In the space of financials, even though Wells Fargo and JPMorgan disappointed, Citigroup did provide the market with the surprising news of a terrific quarter. .

Though many commodity traders may view the decline in oil as negative weakness in the global economy, the "Mad Money" host thinks there could actually be positive connotations. "I think that it helped the psychology of the market that today's hideous 4 percent decline in oil came, in part, because Iran, a huge producer, favors the new Saudi policy of flooding the world with crude. In other words, it's a supply issue," he said.

Cramer doesn't think it is possible to sustain a big rally without the strength of commodities. Simply because there are just too many computer programs at the big funds that say "sell the S&P when oil goes down." He added that the computer programs just don't distinguish the reasons for the oil decline, and it drives down everything.

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So, in the end of Cramer's book of investing, the market will not get to an investable bottom—as opposed to a trading bottom—until the market fears of Ebola, Europe, earnings, margin-selling hedge funds, and anything else investors might not know of, are calmed.

While Cramer's checklist is not inscribed on the tombstone of the bull market, it is a realistic look at what has to go right in order for stocks to go higher.

Though the market did check a few boxes off the to-do list today, and there was a short rally as a result, there are still more to go.

"Not enough boxes to sound an all clear yet in the midst of a still very fragile stock market," Cramer noted.

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