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Deciphering the Dow

Despite predictions that the Dow would be down big, the index posted a triple-digit gain for the second day in a row. That’s the first time the Dow has done that since June 2006.

“You think the Dow should go down, and yet it rallies in the face of what many would call a crisis,” Cramer said. “It was supposed to go down big yesterday. It went up. It was supposed to go down big today It went up...why the heck isn’t it going down with everything else?”

The reason: The Dow just isn’t prone to financial pressure. And its exposure to homebuilders, banks and brokers – the three crisis points in the market right now – is minimal.

Just break down the components. JPMorgan Chase and Citigroup are heavy lenders to private equity and they’re big into mortgages, so they’re hurting. AIG admittedly is feeling its share of subprime woes, but Cramer said it’s not a huge part of the company’s portfolio. That leaves only General Motors, which needs access to credit markets to keep restructuring, as the last Dow component getting tripped up by the market.

So 26 stocks remain, and Cramer called most of them “just amazing.” Companies like Honeywell, Intel and Coca-Cola’s are aggressive buyers of their own stock. AT&T, Verizon, Pfizer and Merck all have a great yield. McDonald’s and Boeing are doing extremely well overseas. Maybe Disney and American Express need a robust domestic consumer, but Cramer said they’re getting one.

“With that list of stocks, how is it any wonder that the Dow Jones Industrial Average didn’t get crushed yesterday when it was supposed to, and didn't get annihilated today when it was supposed to?” Cramer asked.

Despite some horrid parts of the market, Cramer won't back off his 14,548 target for the Dow.

"And if we get a rate cut," he said, "that’s just icing on the cake."

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