Cramer explains how to spot 'fabulous moments' like the Friday session

Cramer breaks down the signs to find out when you can spot a great market moment

CNBCs Jim Cramer reviewed Friday's market action, describing the session as a “magnificent moment,” where stocks opened weak, but the averages climbed nearby. While he said that this particular moment has come and gone, he listed ways in which investors can recognize one in the future, saying that these conditions can provide great benefits.

“We used to call days like today 'beautiful times.' “Those are times when the bears get over themselves because they don't know when to leave,” he said. “We had one today.”

After a difficult week on Wall Street – the Dow Jones industrial average down 1,100 points in one session and posted its longest losing streak in about 50 years – the index to kick Friday. The 30-stock Dow gained 1.18% to close the week while the S&P 500 has grown by more than 1.09% compared to yesterday Nasdaq Composite 1.03 % added.

These “magnificent moments” occur when the market is oversold, according to Cramer. To identify market conditions, he said he uses MarketEdge's S&P Oscillator, which shows when there is overbought or oversold. Cramer said these “magnificent moments” occur when bearish investors show “overconfidence,” adding that Friday saw major stocks as Palantir, Apple and Nvidia crash at the beginning of the session for no apparent reason.

Investors should also look for positive data about the economy when the market is oversold, Cramer continued. He suggested that some of the increased activity on Friday was due to cooler figures from the Personal consumption expenditure price indexa a key metric for the Federal Reserve. Finally, he said, anti-recession news is also something to watch. Investors poured in after the Fed said it would make fewer rate cuts next year than expected. But on Friday, one Fed official said he was encouraged by the PCE report and said rates could still decline, even if the central bank remains cautious.

“It was a really good time this morning,” Cramer said. “They don't come that often. But when they do, you have no choice but to jump.”