TheStreet.com's Jim Cramer says most people are still leaning the wrong way on this market.
In August 2007 we went into a recession because of the collapse of housing. I pick August because that's when I went nuts on TV about how things were falling apart in the credit markets and you just couldn't see it yet in equities.
The deleveraging overwhelmed everything and everyone. The stock market didn't feel it until March, perhaps elated about the prospects of Obama winning, and then reversing itself when it looked like he didn't understand that saving the stock market and the 401(k)s was more important than burdening the economy with tax hikes and utility hikes that would obliterate both housing and stock wealth.
When he became more market-focused, and the Fed took rates to zero and offered financing -- leverage to buy asset-backs -- and took mortgage rates down to record lows while homes lost huge percentages of their value, the fire caught. Lending started again.
And the depression ended. I think it ended in the first week of March. I think that's what Doug Kass saw when he went bullish. I think I saw it when I realized that even if every financial went under and most companies cancelled their dividends, we only had 1,000 points to drop, and you had to start buying. There just wasn't enough downside left.
These are not disputed calls.
Now the end of the depression has to be priced in. Does it mean the Dow goes to 8000? 9000? 10,000? We are obviously still in a recession, so it is not clear yet.
But we know this. Most people are still leaning the wrong way. Most hedge funds are still biased short. Most people who write for this site have hated the market and continue to hate it with few exceptions.
I think you look at it like this: With the depression over, you simply can't hate the market as much as you once did. You must buy things. It is tough to buy up here.
But not as tough as it was down there.
And therefore it's a lot less lucrative.
So, wait for some dip if you have to, some bad piece of information that could rock stocks.
However, you simply cannot be an ursine major when lending starts. Ultimately, YOU CANNOT FIGHT THIS FED.
It will crush you.
It will ruin you on the short side as surely as it ruined you on the long side all the way down to 6300.
At the time of publication, Jim Cramer was long Wells Fargo, JPMorgan, Goldman Sachs and Morgan Stanley. Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO.