6 Keys to a (Much-Needed) Sustainable Rally

Wednesday’s 226-point jump in the Dow may feel good to investors, especially after the 100-plus points we lost yesterday, but don’t get your hopes up. No rally will be sustainable unless six important things happen, Cramer said during Mad Money.

It doesn’t matter what kind of positive news we get. Whether it’s strong auto sales and production, a good housing report or encouraging employment stats from the Texas Federal Reserve, it hasn’t proved strong enough to counter Europe and its debt crisis, China’s government-mandated slowdown, BP’s Gulf of Mexico oil spill and what seems like Congress’ sole mission to hurt American business.

So what do we need to head higher with conviction?

First, the fine print on financial regulation must be finalized. The bank stocks – Goldman Sachs , JPMorgan Chase , Citigroup , Morgan Stanley – will continue to be tenuous investments until President Obama signs this working bill into law. Until then, we’re in the dark.

Also, the Spanish banks, Banco Santander and Banco Bilbao , need to be stabilized. In fact, Cramer said they need a European version of TARP. And they should cut their dividends, too. These institutions are both big and important across the globe, and unless they find solid ground we can’t go higher.

Third, unemployment has to come down. Right now there’s a huge spread on what the bulls and bears expect from the May jobs number coming on Friday. If it’s at the low end, Cramer said, today’s gains will be erased “at 9:31” that morning.

Number four: BP has to plug that well in the Gulf of Mexico. Otherwise the 12% of the S&P 500 that is the oil industry will continue to suffer as a group, as the market refuses to differentiate between the companies affect and those that aren’t. And the sector exchange-traded funds are so powerful, Cramer said, that they take down everything. (On a more positive energy note, Cramer cheered President Obama today for finally endorsing natural gas. The Mad Money host thinks it’s a big deal for the commodity and the related stocks.)

Fifth, China needs to announce its intent to engineer a soft landing, keeping its industrial output high while cooling its real estate markets. That would end the bubble talk, Cramer said, and “make the doomsayers sound silly.”

And lastly, Cramer said the euro needs to hold at this level and the bank spreads among European countries must stabilize. There can’t be anymore downgrades of major countries. Of course, that’s only possible if the Continent’s powers-that-be back both governments and banks with their full faith and credit. But then again, if some of the weaker countries were forced out of the euro currency, that too would help. Cramer thinks this latter option is the most likely outcome.

Only after every one of these items is checked off Cramer’s list will he start to recommend tech stocks like Apple and Salesforce.com as investments, not trades. He’ll turn bullish on retailers like TJX and J. Crew . And he’ll bless industrials like 3M and United Technologies . He’ll even get more aggressive on the accidental high-yielders.

“But until then,” Cramer said, “when the market rallies, you need to think of the next day after the rally as a selling opportunity.”

When this story published, Cramer's charitable trust owned Apple, BP, Goldman Sachs and JPMorgan Chase.

Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the Mad Money website? madcap@cnbc.com