For a clear view of what's happening in the markets today, Cramer on Monday listed seven recent events that bode well for the future:
First, earnings have been "absolutely tremendous." Despite concerns over raw cost inflation, Cramer said more than half of companies that have reported earnings beat on expectations. That's noteworthy, he said, because the bar had been raised for companies.
Second, strong earnings are coupled with reports of sales growth. That means companies are doing well, Cramer said, because it shows there is a real demand for good and services.
Third, U.S. economic news continues to improve. Railroad giant Union Pacific , for example, recently reported a pick-up in traffic. Meanwhile, aluminum producer Alcoa said commercial construction could soon turn around. To Cramer, this kind of news means the economy is gaining strength.
Fourth, costs are higher, but still manageable. PPG Industries , for example, recently said costs could be passed on. It seems those price increases are sticking, too, being as key raw ingredients, like natural gas, haven't become more expensive. In turn, PPG reports its gross margins have improved.
Fifth, if Apple can report strong earnings and then watch its stock get hammered, Cramer said it's hard to tell which stocks won't sell off after earnings. In other words, if a positive quarter can't create upside, it's hard to imagine what an earnings miss might mean.
Sixth, stocks that failed to react positively, or got hit hard after reporting good quarters tend to bounce back. Alcoa , for example, reported amazing cash flow and promising guidance for 2011. Yet its stock sold off after reporting earnings last week. On Monday, the stock started to come back. Schlumberger also reported a strong quarter on Friday, but nonetheless, its stock sold off. Shares began to trade higher on Monday. Cramer thinks this is a pattern, which will continue throughout earnings.
Finally, Cramer said to behold the power of General Electric . When the conglomerate reported earnings on Friday, it showed strength in oil services, locomotives, health equipment, gas turbines, aerospace and media, as well as improved credit quality. Cramer reminded viewers that GE is a financial business that deserves to be thought of as a leader.
When this story was published, Cramer's charitable trust owned Alcoa and Apple. General Electric is the parent company of NBC Universal, which operates CNBC.
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