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Bears Exposed: Cramer Reveals Who's Selling

(Click for video linked to a searchable transcript of the Mad Money segment)

They say, keep your friends close and you're enemies closer. If you're hoping for stocks to go higher, you should know who's working against you.

According to Jim Cramer bulls have a lot of enemies in the market right now. And he's ID'd them all. They follow:

Bond Alternative Investors: The Mad Money host said this group is largely made up of big investors who were effectively pushed into stocks by the Fed's bond buying program. That is, interest rates on Treasurys fell so low, dividend yielding stocks become the only place for them to find yield. "That's stocks such as Clorox and Kellogg," Cramer said.

The issue with these stocks is that as shares have climbed, yield has fallen. (Remember dividend yield equals annual dividends per shared divided by price per share. Therefore as price goes up – the yield goes down.) And when you have a stock only yielding 3%, the risk of a sharp decline isn't worth it to these big investors.

Debi Bishop | E+ | Getty Images

Damaged by Strong Dollar: These sellers were reaching for yield in emerging markets and are now getting hit by the strong dollar. "They've been burned but want to ride out the bet a little longer, "Cramer explained. "Therefore, instead of taking a loss, they sell winners in an attempt to raise cash."

Profit Takers: These sellers simply don't want to surrender their gains. Despite recent weakness, the S&P 500 remains about 10% higher ytd. And as Cramer so often says, it's prudent to ring the register once in a while.

Bruised China Bulls: There are also sellers in the market who were long multi-nationals as a bullish bet on China. However a string of recent economic data out of Beijing calls the thesis into question. And some published reports suggest China may be facing a credit bubble that's 'unlike anything ever seen in modern history.' As a result, some of these China bulls are running for the exits.

Real Estate Skeptics: Some investors are dumping anything and everything related to homebuilding, Cramer said. That's due to uncertainties about how rising rates may ripple across the sector. Already, mortgage applications have started to decline. "These are crazed sellers who used to believe in the housing renaissance but now worry the cycle is done," Cramer said.

Investor Expecting Earnings Revisions: Some sellers are simply trying to get ahead of expected earnings cuts. Considering the spiral that some of the events outlined above could generate, they're trying to sell before, what they believe, is inevitable weakness.

There are a few other reasons behind the surge in selling, but if you're holding stocks for the long-term, the scenarios outlined above are primarily the influences working against you. Now the question becomes, what do you do with this information?

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Cramer believes the biggest takeaway is that, eventually, the selling will die down and if you monitor the catalysts outlined above, you may be able to gauge when the selling is exhausted.

That's important because, "There are people in the market who want to buy," Cramer said. "These are your friends and they are not insubstantial."

Ultimately Cramer believes that bulls will prevail.

But don't buy yet - Cramer also thinks the market could head lower before it goes higher. "Right now we have to wait and see," Cramer said. "However, I believe those who will ultimately come out on top are investors with patience and time."

Call Cramer: 1-800-743-CNBC

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