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'RealMoney' Radio Recap: Brand New Playbook

"The propensity to want to take profits after two beautifully up days cannot be ignored," Jim Cramer told his "RealMoney" radio show listeners Thursday.

"But my take right now is -- don't ring the register," he said.

This is because it's time for the U.S. equity market to play catch-up with the rest of the world because the Fed is going to stop raising interest rates soon, Cramer said.

When it comes to thinking about why a market does well or badly, you need to look at that country's central bank, he said.

Why did the Dow end 2005 down while the rest of the world rocked? Cramer said it's because the Federal Reserve raised rates more than a dozen times in a row, and that by the end of the year there was still no sign that they would let up.

But now signs, including the weak housing market, the recently released Federal Open Market Committee meeting minutes and well-placed articles saying that the monetary tightening may soon end have changed the investment playbook.

"When we see these signs, we must change the way we invest," Cramer said, telling listeners to move to a positive strategy from a neutral one.

He said that the banking sector cannot be ignored if the Fed is ready to let the overnight bank lending rate be.

He also said Dow Chemical (DOW - Get Report) is a perfect example of a smart buy in this environment, and that people should be doubling down on the stock.

It's best-of-breed when it comes to plastics and the gold standard for many industrial companies, he said. But it's the fact that it's cheap that makes it a buy. Dow sells at 8 times earnings when the average company sells at 18 times earnings.

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