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After stocks rebound on Monday, Cramer explains how the market can keep rallying

Jim Cramer
Scott Mlyn | CNBC
  • After a positive day for the major indexes, CNBC's Jim Cramer gave investors several scenarios that may help the stock market continue to perform.
  • These factors include more buyers, the bond market and slowing U.S. job growth.

CNBC's Jim Cramer celebrated the gains across the major indexes and listed several factors that could push the market to see more frequent positive sessions.

On Monday, the Dow Jones Industrial Average jumped 1.58%, the S&P 500 rose 1.2% and the Nasdaq Composite finished up 1.6%.

"Days like today are the reason why we stick around in this otherwise ugly market," Cramer said. "But we also know they've been few and far between, which is why everything in this market is a trade until the bears are finally slain and the bulls can trample unimpeded, which is not the case."

First, Cramer said the bond market needs to see more buyers and fewer sellers, lamenting how the Chinese government has sold a significant portion of U.S. debt over the past several years.

The market may see better days if the U.S. sees growth without inflation, according to Cramer. Employment data needs to show that jobs are still being created, but at a slower rate, he argued. Tamping down wage inflation will also help stocks to rally.

Cramer also said companies need to start giving better forecasts, noting that many are reporting solid quarters but are slashing their guidance. In the same vein, he said investors should give some companies with a history of outperformance the benefit of the doubt. Instead, many stocks are getting crushed due to general sector weakness.

"I don't want to rule out these positives, especially when we're oversold, but I don't see the Chinese government buying bonds, or the Fed to stop selling them, and that backdrop in itself makes it much harder to own anything in this environment," Cramer said. "Unfortunately, right now the bears are in charge, with the bulls merely paying periodic visits to the New York Stock Exchange."

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