Will stocks have a strong fourth quarter?
On the one hand, there are a slew of economic indicators that make Cramer bearish on the market. Orders of durable goods, for example, slumped by the most in 3-1/2 years in August. The U.S. economy expanded at a tepid 1.3 percent annual rate, the slowest pace since the third quarter of 2011, according to the Commerce Department.
In turn, Cramer noted a growing number of companies have made pre-announcements that do not lend much optimism to the upcoming earnings season. Package delivery company Federal Express and railroad Norfolk Southern, for example, mentioned slowing global demand in their preannouncements.
In Cramer’s opinion, though, some companies might be slowing ahead of the so-called “fiscal cliff” — Washington's self-imposed year-end deadline to agree on a plan to shrink the federal budget or trigger $600 billion in spending cuts and higher taxes that were put in place last summer.
(Read More: Corporate America Sweats as US Nears 'Fiscal Cliff')
“When you consider that the Republican party seems to the run by the Tea Party and the Democrats feel like they don’t need to change their ways ahead of what they perceive to be a winning hand in November, we’ve gone from thinking we can jump the ‘fiscal cliff’ to thinking how can we slow business spending so the collision won’t crush us?” Cramer said.
Meanwhile, China’s slowing economy and Europe’s ongoing sovereign debt crisis remain a concern, Cramer said.
On the other hand, Cramer noted there is much to be said for the bullish stance, too.
To start, Cramer said Spain’s austerity measures give hope that there may one day be a resolution to Europe’s debt woes.
There was also renewed optimism that China's government would provide additional economic stimulus, helping Chinese stocks rebound from multi-year lows. In addition, China's central bank made a $57.9-billion injection into money markets this week, the largest in history.
(See: PBOC Makes Record Cash Injection to Fend Off Crunch)
It seems the “fiscal cliff” might have a limited impact on stocks, too, Cramer added.
“Our fiscal retaining wall still beckons, but the stocks that are most vulnerable — retailers, banks and housing plays — all rallied hard today,” he noted. “These moves could be a sign that all is not lost. They wouldn’t be able to rally at all, mark up or no mark up, if there was no chance to avoid a vicious Federal collision.”
(Related: Cramer's Top Dividend Stocks 2012)
To Cramer, though, the stock market will be greatly influenced not by the U.S., but by China and Europe.
“If we don’t get real positives from Europe and China I think we aren’t done going down,” Cramer said. “But if we do get positives from those two huge trading partners, then that will offset the ‘fiscal retaining wall’ that we may very well end up hitting and we will be able to hold in here and go higher.”
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—CNBC.com and Reuters contributed to this report
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