The market may have rallied Monday, but Cramer isn’t jumping for joy yet.
Don’t get him wrong, the “Mad Money” host is happy the day ended up. However, he’s skeptical that the gains will hold more than a couple of days.
“These reversals never seem to have much staying power, he said. “There can be no real bottom, just an emotional bounce, without some resolution to the European issues in general and to Greece, in particular.”
Monday’s late-day rally was due to a report from the Financial Times, which said Italy’s center-right government is turning to China to help pay their bills.
Cramer has long thought intervention from China was a good plan for getting Europe back on track. But part of him thinks it’s too good to be true, and that the only reason stocks rallied is because the short-sellers were afraid something positive might happen.
In any case, it’s too soon to get excited, he said.
“So we play it out. We celebrate the rally. We get ready for a couple of days of nice gains that take us toward the upper end of the range,” he said. “Then, boom, we hit the European chute and we start all over again.”
Cramer said as long as you recognize this progression, feel free to trade. But he would rather stick to high-yielding stocks, stay diversified with cash, and buy some gold on the way down.
“Then, when we get the resolution, you will be ready for whatever financial cataclysm awaits us, even as I can tell you it won’t be as bad here as it is there,” he said.
Call Cramer: 1-800-743-CNBC
Questions for Cramer? email@example.com
Questions, comments, suggestions for the Mad Money website? firstname.lastname@example.org