Jim Cramer says Monday's market bounce may not be finished, stocks can go higher this week

The rally Monday on Wall Street may have more room to run in the very near term, CNBC’s Jim Cramer said after the Dow Jones Industrial Average jumped nearly 650 points, or 1.8%.

The S&P 500 also advanced 1.1% and the tech-heavy Nasdaq added 0.9%, prompting questions of whether stocks could be in for a sustained move higher, as all three major U.S. equity averages are coming off losing weeks.

Cramer said from his perspective, the rebound appears well-positioned to continue, even as the threat of the Covid omicron variant lingers.

“I don’t see much on the calendar that could derail the bull until Friday, when we get the consumer price index number, which I expect to be red hot,” the “Mad Money” host said, referring to the Labor Department’s latest monthly report that sheds light on inflationary pressures in the U.S. economy.

“But in this market four days is a lifetime, and for traders, today was a bird in the hand; maybe two in the bush comes next week,” Cramer said.

One reason Cramer cited for his outlook is MarketEdge’s proprietary S&P Short Range Oscillator, which measures buying and selling pressure in the market. Cramer said the indicator reached a key level late last week during the market’s weakness, suggesting the selling had become too severe.

“It looked like we might be on the verge of something big and bad. Maybe we’d get some horrible omicron numbers over the weekend. But when nothing bad happened, we finally got the inevitable oversold bounce.”

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