The Dow’s up about 103 points Wednesday, thanks largely to the view on Wall Street that much of the systemic risk in the market is gone.
Fannie Mae and Freddie Mac might have been the “last big black holes,” Cramer said, that were scaring away investors. But with Freddie Mac beating its first-quarter earnings expectations today, the company seems to be getting enough business to offset its losses.
"No bear thought that could happen,” Cramer said. “The bears will deny it tooth and nail, but it's happening."
Housing may be improving as well. Toll Brothers’ CEO Robert Toll told Cramer in an interview yesterday that Naples, once a terrible market, is showing signs of recovery. If that market can rebound, Cramer said, than it might mean the rest of the housing market is turning up.
“Housing will be much better 18 months from now,” Cramer said. “That's what the stocks are forecasting."
Consumer discretionary stocks are doing well. Names like VF Corp. and Costco are doing better than Cramer expected. Even names that aren’t top performers, like Wal-Mart and TJX , are up. Kohl’s is probably a sell, he said, after it reports what should be a decent number Thursday.
Caterpillar , Terex , United Tech and Cummins should all go higher as China rebuilds after this week’s devastating earthquake.
Cramer offered a market barometer as well: Research in Motion , Apple , First Solar and Mastercard .
"If you were in outer space and you wanted to know how our market was doing,” he said, “those are the four that you'd call in for."
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