Just when it seemed that the market was stuck in a nightmare that wouldn't end, the averages finally managed to rally on Monday. And of course, Jim Cramer took a close look at the big moves of the day to put the pieces together as to what triggered the rally.
Additionally, Google announced that it is reorganizing into another entity called Alphabet on Monday night. While some may think that this reorganization is just a cosmetic one, Cramer disagreed.
"I bet Ruth Porat, the new CFO...suggested this bit of financial engineering because it basically separates the Google media business from all of that venture capital it supports so Wall Street—the language she speaks—can better understand this entity as the holding company that it really is," Cramer said.
The rally came down to a few reasons for Cramer. First, stocks were radically oversold going into Monday's session. When stocks are that low for that long eventually sellers realize that they will destroy stocks if they keep selling them, so the buyers stepped up to the plate.
Second, China was both horrible and amazing. Chinese export data that was released over the weekend was terrible, but then the Chinese market rallied hard, up 4.9 percent. The horribly soft data gave investors the impression that maybe the Chinese government will do more to prop up its economy.
"They think their government's using some of the proceeds from the U.S. Treasurys they have been selling—$200 billion worth—in order to buy stocks to the point where the vicious head and shoulders pattern in the Shanghai Composite can't be broken, don't laugh," Cramer said.
Third, Warren Buffett made a massive $37.2 billion acquisition when he purchased Precision Castparts. Cramer was happy that this occurred, as any time Buffett does something bullish he tends to rule the market for a day or two.
"The fact that Precision Castparts is a gigantic industrial and the industrials have been sold willy-nilly in this market should not be lost on people. Buffett clearly thinks the pessimism about these behemoths is way overdone, or he wouldn't be buying one," Cramer added.
Before anyone gets caught up in the euphoria of Monday's rally, Jim Cramer warned not to get too excited. Any opportunity that lingers in the market will certainly not be derived from Monday's action.
"I suggest you take a breath and do some thinking, because I bet this move will reverse itself later this week," the "Mad Money" host said.
Instead, Cramer thinks it is best to look in his favorite place for new ideas—the list of stocks that hit a 52-week high from last week.
Excluding stocks of companies that were acquired, Cramer saw an amazing coincidence. There were exactly 60 new highs and 60 new lows, and most were somehow related to oil and gas.
"I think this was a countertrend day, and the themes that dominated last week will reassert themselves going forward," Cramer said.
Another stock that was up big time on Monday was Inovio Pharmaceuticals, when it roared 26 percent in a single session. This surge was based on the news of a major partnership with AstraZeneca that could be worth as much as $700 million in future milestone payments.
Inovio is a small, development stage biotech company with a compelling proprietary immunotherapy platform and cutting edge vaccine technology. Essentially it creates fragments of DNA that inject into cells to produce targeted antigens, which help an immune system fight disease such as cancer.
Could this stock fly higher? To find out more about what Inovio has in the pipeline, Cramer spoke with its CEO Dr. J Joseph Kim.
"What makes Inovio different and unique and perhaps better, is our ability to generate these specific t-cells in the body. So we are generating these killer t-cells, professional killers and Navy Seals, that can seek out these cancer cells in the body specific to the cancer types better than anyone else out there," Dr. Kim said.
After the bears caused some serious damage to the averages last week, Cramer also thought it would be prudent to take took a close look at last week's 52-week low list.
"This list is all about the horrendous decline in oil that we got a brief reprieve from today. But I don't expect this reprieve to last, and the weakness here will take on mammoth proportions if crude takes out the $43 market where it bounced twice this year," the "Mad Money" host said.
In fact, Cramer thought the best opportunity out there could be to use the strength of the oil bounce to lighten up your portfolio from oil names that made the 52-week low list. After all, those stocks made that list for a good reason.
But that doesn't mean there are no stocks worth looking at on the list.
And even as some moves seem like they will be on the downside, Cramer found a few opportunities. Mainly, he thinks that these stocks are unlikely to be on the low list a year from now.
And on a day where stocks rebounded like crazy, Cramer thought it would be worthwhile to circle back one once red hot stock that has taken a serious beating, Radius Health. This is a development stage biotech that is focused on creating drugs that treat osteoporosis and other endocrine-mediated disorders.
What seems strange is that Radius reported last Thursday, and the stock plunged to $68 from $76 because the company a larger than expected loss, along with elevated research and development expenses. This is totally nuts to Cramer because the company is a development stage biotech, which means it doesn't have any products on the market—thus the quarterly results don't typically have an impact.
So could this pullback be an opportunity on weakness, or is there something more hidden under the surface for Radius? To find out, Cramer spoke with its CEO Robert Ward.
"We are talking with partners today, we are a development engine. We finished a successful phase three program, we are getting ready to submit but we would like a partner that is also an expert on commercialization to work with us to commercialize abaloparatide around the globe…we also have a pipeline. Most biotech companies don't necessarily have more than one big idea," Ward said
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
Enterprise Products Partners: "Look, I'm going to tell you that this group is way overdone on the downside and that EPD is the best of the lot. That is not a strong endorsement of whether it is going to go up now. But I am going to tell you that I do like the stock because it's a premier master limited partnership and all of those are heavily under water right now."
Dave & Busters: "That is a very, very hard business. They are really the only guy that has made a success of it. They came public again and they came up and they're doing a good job and I am going to endorse Dave & Busters."