Jim Cramer's 'Mad Money' Recap: A Glimmer of Hope

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NEW YORK (TheStreet) -- The debate has changed in Washington, Jim Cramer told his "Mad Money" TV show viewers Thursday, and it looks like the markets have changed right along with it.

Cramer said that over the past 48 hours the debate in Washington has shifted. The focus is now where it rightfully belongs, on everyday Americans, including those in the military and on Social Security who won't be getting their benefit come Oct. 17. No one wins elections by stopping Social Security, which is why a compromise now seems suddenly possible and why the markets cheered.

But the newfound euphoria may be short-lived, said Cramer. Earnings season is upon us and just about every company will be providing investors with a cautious outlook at best. Yes, the fundamentals are once again going to take center stage, said Cramer, but it may be difficult to find many positives to keep stocks on the upswing.

Cramer said he's worried about technology as telco and discretionary spending have begun to slow. Likewise with the banks, where business ahead of Washington's two-week sideshow had already begun to show signs of weakness. Then there's retail, another major component of our economy, which also struggled to gain a fitting last quarter. Will anyone has positive things to say about this year's back-to-school season? Probably not.

It's the outlooks that determine whether you make money in the stock market, Cramer concluded, and going into this quarter the outlooks are sure to be tempered at best.

Sell Block

In the "Sell Block" segment, Cramer sounded the alarm, saying it's time to trim positions in many of the speculative biotech names that have been up huge so far this year as they play everyone's favorite game, FDA roulette.

Cramer said the recent examples of Ariad Pharmaceuticals , which lost 66% of its value in a single day, and Achillian Pharmaceuticals , which lost half of its value, should prove as sober reminders that not everything goes according to plan in biotech.

Cramer said that stocks such as Insys Therapeutics , up 453% for the year, along with Acadia Pharmaceuticals , up 295%, and NPS Pharmaceuticals and Isis Pharmaceuticals only reflect the upside and none of the downside at these prices.