All rallies might look the same, but sell-offs are all different in their own way. Jim Cramer applied this logic to the plunging of the averages on Monday, even as the proximate cause of the worldwide sell-off was China.
Often when a rally occurs, traders will figure out what stocks have not moved in sync with the S&P, and buy those stocks.
"Why not? A rally should include almost everything because rallies reflect generally positive events that resonate with all stocks. That is totally not the case with sell-offs, which is why we need to plunge into them on a case-by-case basis," the "Mad Money" host said.
Stocks declined significantly in the market open on Monday after Chinese rules involving circuit breakers halted trading after stocks declined 7 percent. As a result, Europe sank 3 percent and the U.S. market dropped 2 percent.
First up were the stocks that need to be sold, which include industrials closely linked to China. While Caterpillar was the most obvious offender of the group, Cramer considers the entire industrial group a blast zone. It gets bought last.
There are three groups that stood out to Cramer that could benefit in the current environment: retail, health care and consumer packaged goods.
So, when should investors pull the trigger? The last Chinese sell-off in August weighed on the market for four days. Cramer expects that it will be only three days this time around. That means investors should start their buying on Tuesday, but not if the market opens up.