'RealMoney' Radio Recap: Analysts Are Sheep

Contrary to popular belief, corrections can work both ways in the stock market, James Cramer told listeners on his "RealMoney" radio show Friday.

Cramer noted how Whole Foods Market (WFMI Quote) shot up in the aftermarket Thursday night after huge quarterly profits. Cramer called it a "correction" to the upside.

"The analysts were incorrect when they told you to sell the stock," said Cramer. "They were corrected when Whole Foods came up with big growth numbers."

Cramer expects all the analysts will be upgrading the stock in the near future, which should fuel another run.

"Some of them wrote speeding tickets for the stock because they didn't think it would grow in double digits," Cramer said. "They can't beat the market because they are the market."

For example, when Raymond James downgraded Best Buy(BBY Quote) Friday, you should use that as a buy signal, said Cramer.

Watching Washington

With a highway bill on the way, Cramer is watching Washington for stock ideas. His top two picks are Caterpillar (CAT Quote) and Terex (TEX Quote), equipment makers that should benefit from the added spending on U.S. highways and byways.

Another caller congratulated Cramer on his successful Smith & Wesson (SWB Quote) call from the day before. The stock ran up after Cramer spoke about gun control legislation in Congress. And he reminded listeners to ring the registers if they made money on the stock.

Elsewhere, housing stocks are still OK in Cramer's opinion. A lot of the housing stocks were selling off Friday, which is fine with Cramer. He said investors may be able to pick them up cheaper next week if economic data causes interest rates to tick up.

Cramer referred a caller with a question on Microtune (TUNE Quote) to the latest research note by TheStreet.com's Stocks Under $10 editor, Will Gabrielski. Gabrielski says he is still positive on Microtune despite a selloff on margin worries.