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Cramer finds 7 negatives-turned-positives that are fueling the bull market

  • "Mad Money" host Jim Cramer lists 10 factors that are keeping the red-hot market afloat.
  • News from top automakers Tesla and General Motors top Cramer's list, despite not being entirely favorable.
  • As Wall Street gears up for earnings season, quarterly reports are also driving the gains, Cramer says.

Despite his decades on Wall Street, sometimes CNBC's Jim Cramer is downright bewildered by how strongly the market trades regardless of the news flow.

"In a stampeding bull like this one, the level of optimism can feel borderline delusional," the "Mad Money" host said. "There's a total suspension of skepticism, along with a widespread belief that everything works out for the best. It's really the stuff of novels, not reality, where the bad morphs into the good and the negatives turn into positives."

1. Tesla

The first instance of this Cramer noticed on Tuesday was news that Tesla's Model 3 production was lower than expected, producing only 220 of the entry-level electric cars when Wall Street expected 1,260.

But instead of sending shares of Tesla into a nosedive, analysts defended the company and its lauded CEO, Elon Musk, asking market watchers not to over-analyze the weakness.

"Yet when I criticized [Musk] for the short-term failure, analysts quickly derided such small thinking, reminding me that Musk did say that the Model 3 would be manufacturing hell," Cramer said.

He continued: "I told one analyst who's negative that this stock is so beloved it would probably go higher, not lower, on the news. This was before the bell. I was doing it just to give him a hard time, but that's exactly what happened as the stock ultimately rallied nearly 2 percent."

2. General Motors

Cramer also found that General Motors turned from a hated stock to a loved one after the auto giant announced it would release 20 new electric vehicle models by 2023.

"After years of not being able to get out of its own way, GM's stock is now in historic beast mode, with analyst after analyst who'd been lukewarm suddenly embracing the darned thing," Cramer said.

3. Delta

Delta pre-announced the details of how Hurricanes Harvey and Irma affected the airline's earnings, but rather than dooming the stock, the news actually sent it over 6 percent higher.

"The idea that Delta's not bathing in red ink was a clarion call to buy this bedraggled group," Cramer said of the airlines. "They are are all beloved now, as much as they were hated just a few days ago. It's a mad scramble to buy the stock of any airline, not just Delta, even though at most moments in history this would've been seen as a not-so-hot quarter and a good reason to sell."

4. Sherwin-Williams

The bears were worried that Sherwin-Williams' 2016 acquisition of Valspar would play out as the paint plays expected because the housing market seemed to be peaking.

But when Sherwin-Williams announced the synergies from the deal on Tuesday, investors turned the mundane into the miraculous, sending the stock up over 4 percent intraday.

5. Homebuilders

The homebuilding stocks have been delivering strong earnings reports to date, but their stocks have nevertheless been getting crushed.

"Every time they report these spectacular numbers, the so-called experts presume that we're looking at the last good numbers before the business falls off a cliff," Cramer said.

But after Lennar issued a strong quarter and its shares saw a 5 percent gain, the "peak housing" thesis seemed to unravel as investors warmed up to the group.

6. Equifax

Former Equifax CEO Richard Smith, who presided over the company during a security breach that risked the information of over 145 million consumers, testified before Congress in a hearing that should have sent Equifax shares plummeting.

Instead, Cramer said it served as a clarion call to buy the stock.

"What an opportunity to buy the beaten-up stock of a company that the banks are still using as if nothing happened. Based on the way it vaulted more than 2 percent today, you'd think the stock of Equifax wasn't facing gigantic lawsuits, or even that Sen. Elizabeth Warren may have upgraded it from a 'hold' to 'buy' and slapped it on the 'Congressional Recommended' list," Cramer joked.

7. Domino's

Cramer-fave food-meets-technology company Domino's has been faced with some negative commentary lately from research firms reporting that traffic has slowed at its locations.

But after Stifel recommended the stock as a "buy" on Monday, the predicted weakness was practically erased, Cramer said.

"Analysts see this kind of action and say, 'Gee, I've got to put on some more buy recommendations. I'm being left behind, especially given that they're moving stocks left and right,'" the "Mad Money" host said. "The reluctance disappears. The sense of fear is over. The buys that you used to slap on that didn't mean anything? Now they're moving stocks. You raise the rating, you raise the price target and the stock levitates and you want to be in on it."

Final Thoughts

In a bull market seeing green, Cramer is concerned that a case could be made for any sector or stock, blinding investors to the pitfalls that might lie underneath.

"Yes, these are indeed the times that try bears' souls for certain — that is, if they even have souls," Cramer said. "Logically speaking, many of these moves should not be happening. The action's way too positive, but then again, you could also argue that maybe we've all just been too negative for too long. And until the bears start acknowledging, en masse, that things are better than they thought, this rally could be far from over."

WATCH: Cramer reins in the raging bull

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