Mad Money

Want to Gauge Market? Follow This ETF

Stocks finished sharply lower in thin trading Thursday after Fitch Ratings warned that U.S. banks could take a hit if theEuropeandebt crisis spreads.

As investors try to find a way to navigate this roller coaster market, Cramer has a few words of advice—before you do anything, watch the FXE , the currency ETF that measures the euro verus the dollar.

“You want to know what stocks to buy if you get good news about the economy or individual companies? First ask about the FXE,” Cramer said. “If it's down, don't even bother with the stocks. If it's up, then the good ideas will work and your portfolio might have a decent day.”

The market is driven by what’s happening inEuropethese days and this is the best way to track it, Cramer explained.

“Right now it’s the euro that’s under assault,” he said. “So, if you think that the countries or the banks that own their debt are failing, you need to be out of that currency. If you think that all the safety nets and government bailouts and assurances are idle or unrealistic, you need to dump the euro. That’s why the euro is the key to this market, and the way we track it is through the FXE.”

The bottom line—put the FXE at the top left of your screen, above the Dow and the S&P.

“They’re both subordinate to it, and so is out country,” Cramer said.

Call Cramer: 1-800-743-CNBC

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