With the European debt contagion no longer a risk, Cramer said Monday, his call to halt most stock buying until Dow 9,000 is off.
Why? Because the entire situation has changed. On Friday, he pointed a finger at European Central Bank President Jean-Claude Trichet for being absent when the Continent needed him most. Greece looked ready to default. Its citizens were rioting in the streets. People assumed Spain and Portugal were next. Meanwhile, all of this weighed heavily on the US markets. But now, after the European Union and International Monetary Fund have agreed to nearly $1 trillion in aid, the threat has been removed.
Given that, “What am I supposed to do? Stay negative?” Cramer asked. “I can’t.”
What we’re left with now is a strong worldwide economy that’s picking up, he said, with little inflation and share-taking by resurgent American companies. And, yes, even the fundamentals of Europe are sound now, Cramer said, while Asia is as “bullish as all get out.”
“That’s the new reality,” he said, “and it is a tremendous one for our stocks. Many of which are still down, some considerably, from their highs of two weeks ago.”
So enjoy this rally. Use it to sell the stocks you don’t like and those that have run too much. Beyond that, Cramer said, you probably don’t want to sell much else.
Of course, this doesn’t mean the kind of move we saw today, with the Dow up over 400 points, is sustainable. But that’s the wrong way to think about it. Instead, just focus on how oversold stocks are right now, how they’ve come down too far too fast, even after today’s action. That should mean there’s a chance to catch more of the rebound.
Call Cramer: 1-800-743-CNBC
Questions for Cramer? firstname.lastname@example.org
Questions, comments, suggestions for the Mad Money website? email@example.com