Cramer's 'Mad Money' Recap for July 22

Click here for an archive of Cramer's "Mad Money" recaps.

---

Despite poor earnings reports, the drop in oil prices is driving the market higher, Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

Oil is all that matters right now and the price of oil is on the decline, he said.

After companies such as Apple(AAPL Quote), Texas Instruments(TXN Quote), SanDisk(SNDK Quote)and American Express(AXP Quote) disappointed with their earnings report Monday, everybody was expecting the market to "get crushed" Tuesday, he said.

"People were crying. Nearly everyone thought there would be some serious blood on the Street today," he said. "That didn't happen, the sky didn't' fall."

Instead the Dow surged with triple-digit gains Tuesday. No one knows why the market pulled through, except me, said Cramer.

The market was up because of the decline in price of oil and gas, he said.

"Oil and gas have come down hard," said Cramer. "Oil is down to $128 a barrel and I think it is going to $120."

The last time oil was at $126 a barrel, the S&P 500, which represents the broadest view of the market, was at 1,403. That's about 10% higher than the index is now. When natural gas was $9, the same index was 3.5% higher.

That means on an average, the S&P 500 is 6.7% lower and will head higher, said Cramer.

"The arithmetic of oil and gas and the decline in oil and gas are irrefutable," he said. "We are 6.5% too low (in the S&P) as of this evening and market is heading up there."

Cramer: JP Morgan Can Save Banks