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Cramer Finds Signals of Better Times Ahead

Can we look forward to better, not worse, times ahead, Cramer asked on Wednesday's "Mad Money."

After having rallied to roughly $1,900 an ounce, gold tumbled sharply on Wednesday to settle below the $1,760 level as investors took profits after the precious metal's strong rally.

More than any other reason, Cramer said it was the reversal of gold that caused the market to rally for the second-straight day. After all, the price of gold measures the market's sentiment on the global economy. So when gold rallied to $1,900 an ounce, it seems many were concerned about the state of the world's economy. The price of gold having plummeted, then, is a good sign.

So why did gold break? After all, many of the underlying problems facing the world's economy still haunt us and we're not out of the woods by any means, Cramer said. He thinks a recession could still beckon, in part, because oil prices are still too high and because Greece may need another bailout.

That said, Cramer thinks some stocks are trying to tell us that something important might be happening.

To start, the "Mad Money" host has long said that we need to see stabilization in U.S. bank stocks to get more bullish. Sure enough, Bank of America's stock soared on Wednesday after Raymond James reiterated its "strong buy" rating on the firm with a price target of $16. It posted an 11 percent gain, Cramer noted.

Meanwhile, Home Depot's stock caught some gains Wednesday, too.

"Home Depot, in many ways, is a microcosm of the U.S. economy," Cramer said. "If the stock is doing well, the consumer simply can’t be doing as badly as some might think."

Finally, Cramer pointed out that it wasn't the defensive names that pushed the averages higher. Instead, it was helped by industrial stocks, including Caterpillar and United Technologies . To Cramer, this signals that good times are ahead.

Symbol
Price
 
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NOVU
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HD
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UTX
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With CNBC.com and wires

When this story was published, Cramer's charitable trust owned Bank of America and Caterpillar.

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