Mad Money

Cramer: The Bears Will Be Back

Last Week's Turmoil: A Dream?

It’s worth taking something off the table during this calm moment, Cramer told viewers Monday, because “when the bears come back, there’s going to be some trouble … [and] the bears will be back.”

According to the “Mad Money” host, we rallied because the short-sellershaven’t been able to pressure down the Italian and French banks due to a short ban there. The bears have also been kept bay thanks to Tuesday’s meeting between German Chancellor Angela Merkel and French President Nicolas Sarkozy on the euro zone debt crisis.

But Cramer thinks that’s about to change. He believes the short-sellers will figure out a way to get around the ban this week.

“I think the bears are going to come in with both gun blazing,” Cramer said, “and I think they are going to renew the attack on the troubled European banks.”

The bears also have to raid the sovereign bond markets and short bonds into the European government bid to try to break it so the ratings agencies panic and downgrade more bonds, he believes.

But the issues aren’t only in Europe. The big macro issues in the US will continue to weigh on the market, Cramer said.

But despite the macro issues, individual companies still matter. Google’s huge bid for Motorola Mobility is an “in-your-face reminder” that stocks represent actual companies and aren’t just part of an index.

Cramer thinks the era of good feeling may soon be drawing to a close, but he said it is “unlikely” we can take out the lows. It all depends on what happens next.

If a major European bank fails, he thinks we could get hammered. If France and Germany can’t agree on much and the pressure is back on the euro as a failed currency, we could collapse. But the lows will hold if a plan is put in place to protect the depositors and clients of any failed institution. And we’ll stabilize if there’s a “grown-up statement about the need to monetize the debt of the troubled nations with euro-backed bonds.”

But the key issue, Cramer said, is to remember that the shorts are in hibernation, and will be back.

Call Cramer: 1-800-743-CNBC

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