Mad Money

Cramer unveils the unspoken rules of Wall Street

This 'extraordinary' rally
VIDEO11:3311:33
This 'extraordinary' rally

It is once again confirmed, America is one heck of a strong engine. Jim Cramer would have thought that after running up 4 percent in a straight line this week, a few profit takers would come in on Friday. But the engine kept roaring, with all U.S. averages closing up, again.

What made the rally so special this week was that it wasn't based on anything.

"It's remarkable, because typically you'd need something to happen to trigger this kind of bullish behavior. But there haven't been any big bad events," the "Mad Money" host added.

Sure the Fed meeting happened, but it didn't change course. Europe is still weak, and nothing is changed in China or Japan.

So what the heck did happen?





TommL | Getty Images

Cramer saw three things leading to this week's rally:

No. 1 - There were different expectations for a totally different kind of week. Many investors were betting that Janet Yellen would raise rates. Those bets unwound as the averages climbed.

No. 2 - Oil stabilized. Those who had bet against oil lost those bets as oil stopped declining for no rhyme or reason.

No 3 - Stocks were higher. Without any global disasters or catalysts, fund managers were willing to pay more for the same data. Funny how stocks are worth more when there is no worry.

What does this mean for next week?

"We have some unspoken rules on Wall Street, and one of them is that you don't make any big, negative changes with just a couple of days to go in a year," he said.

The second rule Cramer shared was that at the end of an up year, fund managers will place orders beneath their stocks to make sure big sellers don't knock them down. A prop trick.

With these two concepts in mind, one would think the market is in the clear until year end. Thus, Cramer thinks that Monday's home sales number won't matter to the market. He also doesn't think the durable goods number on Tuesday will be a game changer, either.

"Thursday is Christmas, and I hope you have your stocking stuffers ready. This is my annual appeal for you to buy one share of Disney for each kid, to get them involved early in the stock market."

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On Friday, Cramer suggested buying some Blackhawk because it has the gift card industry locked down, and he believes it's going to be a huge year for the company. He also thinks investors should buy VeriFone in advance of its card reader being rolled out aggressively next year in conjunction with Apple Pay.

After a week of joy for those who went running with the bulls this week, it's pain for those who bet against it. At least no news is good news for this market, which means a Santa Claus rally could come to town next week.

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