Cramer: I Want to Believe

Don’t believe in this rally. You can’t. The whole thing was just short covering. Plus, company earnings are terrible right now. And the Federal Reserve’s attempts to save us? They’ll fall short. Besides, you can’t trust any market move until housing bottoms. Better to wait for stocks to pullback a bit before buying in.

That’s the nonsense that doomsayers are trumpeting these days, Cramer said Friday. What these people don’t realize is that short covering always starts a rally because the shorts were the investors smart enough to ride the market all the way down. Now, they’re switching strategies to capitalize on the turn in stocks.

Also, the market forecasts the economic picture six months out. So we should be more concerned with what company earnings will look like then rather than now. And the Fed’s bold actions are a big reason this rally happened in the first place. As for waiting for a housing bottom, any area that saw home values drop 40% is already there.

So believe. The market is not going to pull back to the extent that the doubters think. That doesn’t mean you buy in at this level, though. Unless, of course, you pick up Celgene or consumer staples like Pepsi . It’s just that Research in Motion’s big 69% jump from bottom to top has Cramer a bit wary. So while he thinks we still go higher eventually, he wants investors ready for a correction, however small.

Don’t sell all your holdings, though – only those that meet the aforementioned requirements. But the bottom line here is that the easier money has already been made. Investors need to recognize, Cramer said, that they missed the move.

Cramer's charitable trust owns Celgene and Pepsi.

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