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Why Rallies (Still) Aren’t Sustainable

After watching the market rally Monday morning, only to have the Dow close down 115 points, Cramer urged caution and revisited a checklist of six things investors must see before getting bullish. Especially because, since he wrote the list on June 2, things have only gotten worse.

FinReg Reform Finalized

While President Barack Obama is pushing to get financial regulatory reform passed by the end of next month, Cramer isn't holding his breath. But he does believe the bill will be "benign for the banking industry." Still, the financials continue to take a hit because we don’t yet know the fine print of this bill.

Spanish Banks Stabilized

Banco Santander, Europe's largest bank, faces a two-fold problem: non-performing assets in Spain and tens of billions in Spanish bonds. If the government falls, the economy slows down or the country has a "terrible" bond auction, Banco Santander – and Banco Bilbao, for that matter – will "get hammered." (Click here for Cramer’s six-point plan for saving Banco Santander.) Investors must remain cautious of that happening.

Unemployment Falling

Friday’s jobs numbers were "terrible," Cramer said, and the Dow is down 400 since then. He blames the "pro-labor, anti-capital policies Obama and Congress," which have scared businesses large and small enough that they refuse to hire new employees.

The Oil Spill Must Be Stopped

Over the weekend, BP capped half of the spill at 10,000 barrels of crude. But 20,0000 barrels are still gushing into the Gulf of Mexico, which is double the amount reportedly flowing a few weeks ago and four times what BP said was spewing out last month. Cramer called it a “hollow victory.”

A ‘Soft Landing’ in China

China must say it is having luck with its soft landing, as the government tries to slow down its overheated economy, especially its real-estate market. That’s not happening. Copper, for example, is at a seven-month low and the Baltic freight index has been declining. Plus, there are a number of big IPOs coming up, Cramer said, that can’t be good news for China’s stock market. He said the last thing that market needs is new supply.

Need to See the Euro Hold

When Cramer first wrote this list, the exchange rate was at $1.22 to 1 euro. It is now $1.19 and "showing no signs of stabilizing whatsoever." Cramer called it "extremely worrisome."

Bottom line: "We are not going to go higher in any meaningful way until these issues are resolved or the market takes an even bigger tumble," Cramer said. "We can solve the problems, but we’re not there yet, as today's horrible action showed and I think we’ll most likely go down either way without six boxes checked to my satisfaction."

When this story published, Cramer’s charitable trust owned BP.

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