Tuesday brought more volatility to the markets, kicking off the worst start to September seen in 13 years. Jim Cramer divided investor reactions to the carnage in to two categories: those who allow themselves to be controlled by their emotion and those who stay calm and make decisions based on reason.
"Or will you decide to care more about the United States than China, given that we live in the United States, not China, and the two are very different despite the prevailing wisdom that if things are horrendous in the People's Republic they must be horrendous here, too," the "Mad Money" host said.
At least, that was the assumption behind Tuesday's horrendous decline.
It is on days like this that Cramer is reminded of why he has always kept a copy of The Wall Street Journal from Wednesday, October 4th 2011 on his desk. It reported on an important day of the market, with the front page covered with stories of a bear market.
However unlike in 2011, Europe is in good shape and is getting better. The U.S. is also headed into a presidential election year, which historically means more money will flow into the country.
So, yes, Cramer recognizes that it is a bad time out there on the market. It is bear market bad.
"Maybe the market keeps heading lower as everything seems so terrible. Or maybe things start to get better soon and we just don't know it, like on October 4, 2011," Cramer added.
Until then Cramer is keeping his eye on stocks that are not related to China, such as Celgene and Netflix.
Cramer saw earlier on Tuesday morning that the futures indicated that the market would be down more than 2 percent, thus it was down more than 2 percent. That is just the way it is.
"The big price swings are happening because huge pools of capital are whipping around the futures, and the futures are obscuring the individual players that might be doing well," Cramer explained.
And while some may choose to bemoan these discounted stock prices, Cramer chooses to exploit them. He reviewed various stocks to put together what he believes is a winning portfolio at prices he likes.
First up was Celgene, because it does not have business in China. The stock previously traded at $139, but that price is now in the rearview mirror. Thus Cramer would like to wait until it hits $113, where it traded last week.
Next up was Facebook, which hit $83 on last Tuesday's low. Cramer has confidence that it could earn as much as $4 a share in 2017 and at $83, an investor would be paying about 27 times earnings. And while that might be expensive for the moment, when Cramer took into consideration the fact that it grows at almost 30 percent a year he is willing to pay up to get that kind of growth.
His last stock pick is Kimberly-Clark, which is down more than 6 percent since last Tuesday. Yet the business has remained virtually unchanged, and its yield has grown. A good deal!
And looking at the horrendous action in the market on Tuesday, Cramer wants investors to realize this is what it looks like when the Federal Reserve tightens while U.S. manufacturing data expands at its lowest pace in 2 years. This is exactly what happens when the Fed ignores China.
"I recognize that there is no good time to raise rates, but this would be a particularly bad time to raise rates," the "Mad Money" host said.(Tweet This)
What really scares Cramer is that there are enough people on the FOMC who look at employment and car sales and think they have done their job and the U.S. is ready for a rate hike and just want to get it over with.
But a "just get it over with" mentality is not a reason to do anything in Cramer's book.
Read More Cramer: Why a rate hike is a terrible idea right now
A horrendous piece of manufacturing data from China sent the U.S. stock market tumbling yet again Tuesday, taking the price of oil lower along with it. Cramer is hoping the price of crude heads higher, because many oil companies could be in real danger if it sinks any further.
"Like I keep telling you, there is roughly $200 billion of debt from these oil companies on the high yield bond market, and when the price of crude is plummeting everyone starts getting scared that something terrible could be lurking in the world of fixed income," the "Mad Money" host said.
That is why Cramer sought the insight of Carley Garner. She is a technician, co-founder of DeCarley Trading and colleague of Cramer's at RealMoney.com. Garner has a successful history of predicting the trajectory of crude on "Mad Money" and spotted the bottom in crude and the volatile events following afterward.
So where does Garner think oil is heading next?
Garner pointed out that during the recent decline in oil, large speculators unloaded approximately 40 percent of their bullish holdings. This is a good thing because back in July, big money was way too bullish on oil with a net long position of 328,000 contracts. Last week that dropped down to roughly 200,000 futures contracts.
Garner thinks this is a wonderful sign for oil, as in recent years when net long positions on crude drop to that level the selling will dry up and prompt a rebound.
"The fact that the big boys were throwing in the towel and capitulating right near the bottom is exactly why Garner now believes the path of least resistance for oil is higher," Cramer said.
Read More Cramer: Buckle up! Oil could skyrocket
Cramer also thinks it is worth remembering in a treacherous market like this one that investors are now playing by a very different set of rules. That means they need to be more selective when picking growth stocks.
Some growth stocks can roar higher against a positive backdrop, but become very risky when the environment turns increasingly negative. As an example, Zoe's Kitchen was a once-loved Mediterranean themed fast-casual restaurant chain that has been thrown to the curb by investors in the past month.
Cramer used Zoe's as an example, as the stock has remained quite expensive and is barely profitable. Thus, if investors want to speculate on a high-flying growth stock in this brutal environment, it needs to be a flawless performer with accelerating revenue growth. That makes Zoe's far too risky for Cramer to endorse.
In the Lightning Round, Cramer gave his take on a few caller favorite stocks:
Apple Hospitality REIT Inc: "I think these are good. I think that this thing yields 7 percent, and that's probably wrong. The stock should be higher and the yield lower. This group has been crushed today, I think it's opportunity."
Omeros Corp: "The problem with Omeros is that you've got stocks like Celgene that are now down so much that you want to start thinking about moving up the quality food chain. It's a nice spec, but the quality food chain has really come down."