If there is one lesson that Jim Cramer has learned about the market, it is to never forget what brought it down and certainly don't forget what brought it back up. Most of the time unfortunately, investors forget these elements and let emotions control their actions on the tape.
However, the "Mad Money" host prefers to be clinical about things and remove emotions from the equation altogether. For instance, before Wednesday, oil stocks have been declining for ages, and the oil complex has been regarded as one of the most dangerous groups out there.
Cramer reviewed the oil charts with technician Bob Lang on Tuesday and actually found that the charts showed some of the major oil patch players were ready to bounce back. And despite the outrage from many investors that Cramer received, Wednesday marked one of the biggest oil stock rallies in ages.
"You know I haven't liked the set-up for ages, and that skepticism has been warranted as the Dow had been down nine out of the last 10 days. But, like the oils, this kind of selling can get overdone," Cramer said. (Tweet This)
So, while it was a horrendous morning for the bulls on Wednesday, Cramer remained calm because he recognized that the right ingredients were in place for the market to rally. After all, the data indicators that he looked at were flashing green lights while the rest were flashing profoundly red.
There are three elements that Cramer has been focusing on in the past few weeks: the superfreakin' strong dollar, oil and China.
However, the plummeting of all the other commodities meant that long-term interest rates in the U.S. went down. That means that bond market equivalent stocks would go higher, and sure enough stocks like General Mills and even Procter & Gamble moved higher. Cramer even recommended Wal-Mart as a winner for the U.S. stock market, amid the turmoil in China.