The financial reform bill has certainly caused some consternation among the financial stocks. Wall Street always hates uncertainty and the ambiguity of the 2,000 pages of the financial reform bill has caused plenty of it.

Yesterday, the Dow close down 268 points in what Jim Cramer described as a “horrible, stinking bad day” that was reminiscent of “Stalingrad or Verdun.” Well, maybe not quite that bad.

After looking at the carnage of the financial sector there is one stock that Cramer feels offers investors lots of upside.

Cramer describes Citigroup (C: 34.23 0.00%) as a “pitiful giant”. The stock has suffered from a mishandled attempt by the Treasury to sell their stake in Citi. These strong selling pressures have pushed Citi’s stock price down and there’s more still to come.

However, on a technical basis it appears that Citi is oversold. The Street.com technical analyst Tim Collins believes that the current prices provide a good entry point. He predicts that the stock could rise to $4.60 – $5.00 in the short term.

Cramer is even more positive on the fundamentals. He has faith in CEO Vikram Pandit and likes the firm’s mix of domestic and international business. Most importantly, Cramer believes that Citi has little exposure to housing which is once again become a huge problem area.

Cramer set a $12 price target for Citigroup over the long term. He recommends that investors buy Citi at its current levels.

Cramer took yesterday’s positive new housing starts number to indicate that demand is returning to the market as inventory levels decline and homebuilders feel confident that they can get to work again. While Cramer warned against buying homebuilders just yet – he did recommend buying banks with significant mortgage exposure like Wells Fargo (WFC: 30.63 0.00%), JP Morgan (JPM: 38.30 0.00%) and Bank of America (BAC: 8.13 0.00%). 

Unfortunately, financial stocks took a beating today with Wells Fargo dropping over 5%, Bank of America fell over 3% and JP Morgan Chase falling more than 2%. 

Bullish comments about Sociedad Quimica (SQM: 59.31 0.00%) and Terra Nitrogen (TNH: 210.50 0.00%) also failed to lift their stock prices today with SQM falling over 4% and SQM dropping more than 3%. 

In a contrarian play by the markets today, all of Cramer’s bearish stock picks on yesterday’s Mad Money show ended up posting gains for the day. Domtar Corporation (UFS: 92.43 0.00%) gained nearly 2% despite Cramer saying, “I’m not buying it. I think it’s going right back down… sell, sell, sell!” Bearish comments about Taiwan Semiconductor (TSM: 14.19 0.00%), Duke Energy (DUK: 21.38 0.00%) and Gamestop (GME: 24.49 0.00%) also failed to influence the markets as all three posted solid gains. 

However, the “Cramer Effect” helped lift the semiconductor sector today after Cramer recommended Cadence Systems (CDNS: 11.76 0.00%), Broadcom (BRCM: 37.66 0.00%), and Brocade Communications (BRCD: 6.12 0.00%).