Demand for industrial goods is strong, Cramer said Monday. The "Mad Money" host dismissed the drop in commodity prices and highlighted the flurry of mergers and acquisitions in the farm and construction machinery space, as of late.
Mining equipment manufacturer Joy Global , for example, announced that it will buy Rowan Companies’ drilling and mining gear unit for $1.1 billion in cash. Cramer compared it to Caterpillar's plans to purchase Bucyrus . These kinds of deals suggest there is a lot of business out there, he said.
“These companies not only see no end to the cycle, they don’t think it is a cycle,” he explained. “They think that there’s a secular trend to be able to have more mining because of the growth of countries like China or India and I find it irrefutable.”
Cramer said the drop in commodity prices, including and especially oil and gas, is not a sign of demand. Instead, he thinks it's a sign the margin players bet wrong. He thinks the majority of traders had been betting on margin. When the exchange raised margin requirements last week, those traders started selling. In turn, the commodities started selling off.
So what's the trade?
Cramer is bullish on Caterpillar, as well as Deere and Cummins . His charitable trust currently owns all three names.
Elsewhere in the market, Capital One Financial reported Monday that last month it had its lowest rate of credit card debt it could not collect since 2007. Cramer believes the drop in delinquencies is a good sign for housing because he thinks credit cards are a great judge of what’s going to happen with mortgages.
“If you really were in trouble, you’d walk away from your credit card, too,” he said.
Although the data is good news for financials, it's not enough for Cramer to buy bank stocks.
"Banks are in a new world,” he said, adding they will have to start bowing down to the new Consumer Financial Protection Agency. Cramer believes banks that recognize the new regime will make a lot of money.
Finally, First Energy had good news Monday when it hit its 52-week high. Cramer said this isn’t just about interest rates going down, it is about power demand. In the Great Recession, utility companies had dramatically reduced power usage and this news gives Cramer heart.
"I do not think we are heading toward a recession,” Cramer said. “I do not think that we are in trouble in this economy.”
When this story was published, Cramer's charitable trust owned Caterpillar, Cummins and Deere.
CNBC.com with wires
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