While Cramer relies on the fundamentals to inform himself, he's aware that the technicals seem to now be ruling the markets. Both the bulls and bears read the charts and while the negativity had been out in full force last week, the charts turned. We got four Bs, Cramer said: blastoffs, breakouts, bases and bottoms. The "Mad Money" host uses these four categories to identify positive signs on a chart and there's been so many, he gave them greater consideration on Tuesday's program.
First, the Blastoffs include Chipotle , Netflix , Salesforce.com , F5 Networks , Akamai and VMware . The bears may try to spread bad news about these companies, but Cramer doesn't think they'll have any luck. The utilities are terrific, too. He recommends buying those that yield more than 5 percent, like Progress Energy or Exelon. Others to watch include gold with the SPDR Gold Shares exchange-traded fund, restaurants with Darden and Yum! Brands and in the travel and leisure space, consider Las Vegas Sands and Starwood . For the agriculture trade, Cramer likes Potash , Tractor Supply and Archer Daniels Midland .
There are breakouts in insurance and rails, Cramer said. To play it, he would buy Berkshire Hathaway, which is owned by famed investor Warren Buffett. The conglomerate owns insurance giant Geico and the Burlington Northern railroad. Cramer would aggressively buy this stock to participate in the breakout.
Several industries are basing, meaning putting in a floor and turning around, including heavy equipment names: Caterpillar , Joy Global , Eaton and Emerson . Many autos and auto related stocks have based and some are already breaking out, Cramer said. He's also watching aerospace, where Boeing put in a floor and then rocketed higher along with Goodrich and Ametek .
Banks are now bottoming, Cramer noted. Bank of America , JPMorgan , Wells Fargo , Morgan Stanley and US Bancorp are no longer in free fall. This is an area of weakness for the bears and they know it, Cramer said. That's why you'll suddenly start to hear about Portuguese bonds or Allied Irish Bank when most people hadn't heard of it a week ago.
"The bears need to spread these negative stories to stop the bullish advance and they do it because it works," said Cramer. "The bears have been incredibly effective at spreading innuendo and fear."
The bears were brilliant at undoing the bottoming process that was unfolding in the banks, Cramer said. Unless it holds Wednesday, the market will push lower. But Cramer thinks the banks will hold because investors are getting wise to the bears overplaying their same old hand.
"Things are still looking better for the bulls," said Cramer. "Today's action could be merely the death throes of a bearish defense that’s on its last legs."
When this post was published, Cramer's charitable trust owned Bank of America and JPMorgan Chase.
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