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From breaking bad to breaking good: Feb looking up

Cramer: Facts are changing

Talk about a change of course! It looks like the market has changed its mind in February and gone from straight up Walter White-style breaking bad to breaking good. At least, that's what Jim Cramer thought when he watched the averages rally on Tuesday.

There were so many once-broken things that contributed to the market rally for the past two days that Cramer decided to review exactly what led to it.

First is currency. Just last week, investors feared that the would remain in free fall status for eternity and throw the industrial recovery of the U.S. into a panic. Just last Tuesday, the rumors were that the dollar would move another 10 percent higher and could happen overnight.

That is exactly when the euro bottomed against the dollar and made a U-turn. Now the euro is killing the dollar for the past four days. What the heck caused this dramatic currency change?

Cramer suspects that foreign currency traders were betting that the Greek elections would obliterate the euro and cause a "Grexit"—and that didn't happen.

Brian Cranston as Walter White
Source: AMC

The "Mad Money" host has even seen signs of an economic turn happening in Europe. What else explains the strong German auto sales? Or Manpower Group's claim that it sees very strong growth in Northern Europe?

"Let's just say Europe's breaking good. You don't get this kind of currency rally unless it's backed up by something real," Cramer added.

Second is oil. Just a week ago, there were concerns among investors that oil would not be able to find its footing. But now crude is up $10, a rapid transformation.

Additionally, there have been a significant number of oil companies reporting and guiding down for the year. Now these stocks are flying ,despite number cuts and downgrades. In Cramer's opinion, this is exactly how a bottom is defined.

And finally, something happened that Cramer never thought would occur—copper rose from the dead. A week ago copper was dropping with no end in sight and was considered the barometer of Chinese growth. But just one week later, it is once again roaring!

Perhaps China is making a comeback?

All of these components to the rally in the past few days are significant, because these are precisely the exact reasons that companies cited for guiding down for the year. They claimed all of these things were breaking bad in the wrong direction, and now they are breaking good.

So if this upturn trend continues, then Cramer thinks the downbeat guidance and number cuts won't hold, and there will be positive repercussions in February.

"If all those companies that reported last month were to report now, you would've seen far more guide-ups than guide-downs. It's a gigantic do-over, and that's why the market is roaring," said Cramer.

Read more from Mad Money with Jim Cramer
Cramer Remix: Let me be clear on oil
Cramer: This rare diamond is trouble
Cramer: January's broken market gone?

As of right now, it looks like we have found the bottom for oil, the euro, interest rates and copper. Even consumer spending is better than initially thought.

Talk about a total reversal!

So while January may have brought the gloom and doom of Walter White, it looks like February is changing course. Cramer thinks now is the time to make the best of this move.

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