Cramer: This Market Can’t Be Trusted

It’s easy to feel confident when the Dow soars 938 points, but be careful, Cramer said, “This market simply cannot be trusted.”

An 11% jump in one day, the best in 75 years, in the end is nothing but another sentimental market reaction. Instead of taking us down sharply, as fears of bank failure and overall market instability did last week, we went sharply up because…Europe is working in concert to save its system, Morgan Stanley didn’t collapse over the weekend, major bank CEOs are in Washington to meet with Treasury…pick a reason – almost any would do.

Today’s near 1,000-point leap was a classic oversold rally. After suffering through such a horrible week, the worst ever, it’s only natural that we got a big bounce today. So we could have gone up on almost any positive news, Cramer said.

His message for Monday’s Mad Money was to not get so excited, especially about the meet-and-greet in Washington. At the end of the day, we don’t really know what that alleged new plan will do. It could offer more mortgage money or lines of credit for consumers, but we don’t know. We do know that banks desperate for capital should see more with this plan, but we don’t know which banks or how much or whether the money comes in the form of equity stakes, preferred stock or common.

No matter what comes out of the Washington gathering, it will only take the Great Depression II off the table. It won’t help struggling companies make their earnings estimates, it won’t solve problems at Ford, Chrysler and GM, and it won’t prevent home prices from dropping further. Not that avoiding another depression is some small task, but Cramer didn’t want investors thinking this was a time to buy the market wholesale.

He’s keeping his list of what works to the themes he’s mentioned before: recession-proof stocks like Heinz and Kellogg, good yielders like Altria, oil names with dividends like Kinder Morgan Partners, stocks hit hard by hedge-fund selling like Trinity or Quanta Services and companies trading near their cash like KBR.

Cramer’s bottom line: Any stock that doesn’t fit into the aforementioned thesis should be sold into strength on Tuesday. This market’s just too treacherous to own anything else.

Jim's charitable trust owns Altria and Quanta Services.

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