Japanese military helicopters and fire trucks poured water on an overheating nuclear facility on Thursday and the plant operator said electricity to part of the crippled complex could be restored in a desperate bid to avert catastrophe.
There is growing concern about radiation leaking from the earthquake-shattered plant, which is roughly 150 miles north of Tokyo. Earlier, workers at the plant were trying to connect a 0.6-mile long power cable from the main grid to restart water pumps to cool reactor No. 2, which does not house spent fuel rods considered the biggest risk of spewing radioactivity into the atmosphere. One official from the plant operator told a late night briefing the cable could be connected within hours. Other officials said it was unclear if water pumps at reactor No. 2, which sustained less damage from a series of explosions, would work.
With the Japanese military involved and with power lines expected to reach the stricken plant, Cramer said investors are shifting focus from Japan to Bahrain. Geopolitical unrest in the Middle Eastern country has sent oil prices higher. While the markets viewed $100 a barrel oil negatively last week, it views it positively today. After all, higher oil prices mean higher earnings for oil and oil services companies. Both groups were crushed in the past few days, but are starting to rebound.
"I think that people are girding themselves for permanently higher oil prices post-Japan and investors are willing to go back into these highly volatile stocks now that they've been hammered," Cramer said, adding that there might have been an option-related short squeeze ahead of option expiration on Friday.
As with oil, the market has changed its mind on the euro, too. Two weeks ago, the currency got hammered. The collapse of Portugal, Spain, Italy and Ireland loomed over the market while upcoming bond auctions made investors all the more worried. Spain caught a downgrade and the country failed a bank stress test. Before long, the euro plummeted.
On Thursday, however, the euro exploded higher. A strong euro emboldens the world, Cramer said. Hedge funds take more risk and buy commodities, like copper, corn, aluminum and nickel. In turn, miner Freeport-McMoRan and Joy Global , as well as fertilizer producer Potash saw shares climb. Should Japan's nuclear crisis fizzle out, Cramer thinks these stocks can go much higher.
Going forward, Cramer recommends being cautious in this market. While things looked better in Japan, Bahrain and Europe today, he thinks they could look much worse tomorrow. He expects more European countries will catch downgrades. Bahrain isn't stable by any means and most fear it will only get worse, he said. If the unrest drives oil prices higher, it could destroy demand and stocks will fall once again. Meanwhile, the media reports the Japanese military may be fighting a losing battle.
"When we rally and get euphoric, I have to temper your enthusiasm," Cramer said. "Remember, these are ongoing problems. Get used to them."
Call Cramer: 1-800-743-CNBC
Questions for Cramer? email@example.com
Questions, comments, suggestions for the Mad Money Web site? firstname.lastname@example.org
—Reuters contributed to this report