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Cramer Remix: Profit powerhouses for 2016

Jim Cramer couldn't help but notice how quickly investors wrote off 2016 after about nine hours of trading. But the market proved on Tuesday that sometimes the facts refuse to align with a negative story.

"So, what ended up happening? How about a breath of rationality and a departure, no matter how momentarily, from crazy town?" Cramer said.

Cramer has referred to a crazy-town market as one that has stocks linked to the price of oil. If oil goes up, so do stocks and vice versa. But in the real world lower oil prices are additive to the earnings of many industries, such as the airlines.

In fact, the oil stocks themselves rallied on Tuesday. That was the first time in ages that Cramer could recall that oil stocks diverted from the price of crude.

Even household names such as McDonald's, which Cramer thinks will be a powerhouse in 2016, along with Kimberly-Clark, Clorox and PepsiCo were able to rally off of a whiff of a Fed-induced recession.

"I like a market where the facts can and do get in the way of a negative story," Cramer said. (Tweet This)

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From Cramer's perspective, the Chinese communists are running the Shanghai composite through trial and error. They are inventing new techniques to manage stocks and will do what is necessary to stabilize the index.

On Monday, they tried circuit breakers, and that ended in error. Tuesday, they decided to put billions to work just so market didn't crash under its own weight.

They are doing whatever they want. Cramer wouldn't be surprised to see the Chinese government go to great lengths to extend the ban on selling large blocks, bar insiders from significant sales or even demand households only buy stocks, not sell.

While these tactics may sound ridiculous to some, Cramer thinks they could actually be possible under the rule of law in China.

"The rule is very simple — the Communist Party runs the show, and they will do whatever is necessary to keep the balls in the air, and do it longer than anyone here in the West believes possible," the "Mad Money" host said.

So, if the Communist Party wants the Shanghai composite index to stay above 3,000, Cramer thinks they will find a way. They did it in August, and will do it again.

Read MoreCramer: Communist China is guessing with stocks

Standard & Poor's headquarters in the financial district of New York
Stan Honda | AFP | Getty Images
Standard & Poor's headquarters in the financial district of New York

With the arrival of 2016, Jim Cramer decided to do some dumpster diving among the worst performing stocks of the S&P 500 in 2015.

"But I don't see a lot of dreams among the dirt pile of underperforming stocks that make up last year's biggest losers of the S&P 500. In fact, I see pretty much the opposite," Cramer said.

When Cramer reviewed the loser list, many of them had one thing in common — fossil fuels. That means there may not be much hope for them unless there is a series of geopolitical events that end the glut in oil and gas.

The S&P's worst performer last year was Chesapeake Energy, which declined 77 percent. The company made many smart moves to stave off the decline in its stock, but the debt-laden company ultimately outspent its cash flow by billions. Shareholders had nothing to show for that spending by the end of the year.

Read More Cramer: Dumpster diving the S&P's losers of 2015

However, Cramer did not forget about the winners of the S&P 500 from last year. Last year was an insane year because only a handful of stocks were responsible for the gains in the market, while the rest went down,

The top five performers were Netflix, up 129 percent; Amazon, up 129 percent; Activision Blizzard, with a 92 percent gain; NVidia, up 63 percent; and Cablevision, up 53 percent.

Many of the winners last year were companies that got takeover bids, which is why Cablevision finished so high. Therefore Cramer chose to remove Cablevision, and add in the stock of Hormel, which finished only 0.4 percent behind Cablevision.

Another group that seems poised to work well in a growth starved 2016 are the beverage plays. In 2015 the PBJ, the ETF that tracks the food and beverage industry, had a 7 percent gain in the same 12-month period where the S&P 500 finished down.

"Right now, you need a good defense, and these food-and-beverage stocks are as defensive as it gets," Cramer said.

That is why Cramer turned to Bob Lang, a technician, founder and senior strategist at ExplosiveOptions.net, and colleague of Cramer's at RealMoney.com.

Lang found that Cramer-fave PepsiCo could be ready to run higher this year. There has been very little movement in PepsiCo in the past two months, which suggested to him that the big institutions are holding he stock. Lang thinks that it could be building a base at a high level as it traded sideways in the past few weeks, which could indicate that it is ready to move higher.

Lang also thinks that Dr. Pepper Snapple and Constellation brands are positioned to outperform this year. Cramer agreed, though he recommended waiting for Constellation to report in a few days before pulling the trigger on it.

In the lightning round, Cramer gave his take on a few caller-favorite stocks:

Public Storage: "I happen to love this stock ... It was cut to neutral by Goldman at the end of the year and I said to myself this one is the great real-estate-investment-trust baby boom play."

Exelon: "Not crazy about Exelon. I like Dominion. Exelon doesn't have the growth, but I wouldn't bother to sell it here. It's really gotten hammered already."

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