Cramer's 'Mad Money' Recap: Trading Off Misleading Headlines (Final)

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NEW YORK (TheStreet) -- "Headlines can cost you a fortune," Jim Cramer cautioned the viewers of his "Mad Money" TV show Tuesday.

He said any investor trading just off the headlines of the day missed out on an incredible rally.

Cramer warned yesterday that today's housing headlines would likely tank the markets, but instead it was the earnings headlines that did most of the damage. He said that while the media touted Goldman Sachs (GS), a stock which Cramer owns for his charitable trust, Action Alerts PLUS, as a huge earnings miss, Goldman actually earned $2.75 a share, a full 76 cents more than estimates, when government fines and penalties are factored in.

Cramer said the same point could be made with the earnings of Whirlpool (WHR), Johnson & Johnson (JNJ) and Pepsico (PEP).

He said all three these great companies saw negative headlines on their better- than-expected earnings. Cramer said savvy investors could have caught a seven- point swing in Goldman had they bought at the lows, and caught similar moves in the others.

The headlines even affected tech bellwether Apple (AAPL), another Action Alerts Plus name. Cramer said the market open saw Apple down five points, but investors could have caught a 20-point surge, as Apple traded up 11 points when it reported after the bell.

Cramer said the real story today was China, where the Chinese-mandated economic slowdown appears to be working, and the country is once again buying commodities like copper, oil, gold and steel.

He said China is far bigger than any domestic headline, and is great news for stocks like Caterpillar (CAT), Bucyrus (BUCY) and Joy Global (JOYG).