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Cramer's 'Mad Money' Recap: Bears' Conundrum (Final)

Stocks in this article: PPOHEVAVAVAPSGAMZNGGJAH

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NEW YORK ( TheStreet) -- "We can't sell off of both good news and bad news," Jim Cramer announced to the viewers of his "Mad Money" TV show Tuesday, as he examined two bear conflicting bear arguments for why the markets should be lower.

Cramer said one the one hand, the bears argue that the markets are worried about inflation, and the Federal Reserve's unwillingness to stop it. But on the other hand, the bears also argue that falling commodity prices are signaling a global slowdown where the estimates are far too rosy.

He said the bears can't have it both ways. He said we simply can't have inflation if commodity prices are falling, and commodity prices don't fall when there's inflation.

Cramer said his biggest worry going into 2011, and perhaps the only thing that can stop his predicted 12% rally in the Dow, is oil prices. Cramer said if gasoline tops $4 a gallon at the pump, then all bets are off, as that's the psychological level where consumers begin to freeze up and stop spending.

But that's not happening, said Cramer, as oil sank nearly $10 last week. He said the market weakness has created opportunities to buy in stocks like McDonald's (MCD), a company that reported strong earnings, as well as in the bank stocks and credit card companies, two sectors that are "ready" for another move higher.

Cramer also gave the nod to retail stocks, chiefly Kohl's (KSS), a stock which he owns for his charitable trust, Action Alerts PLUS , along with Wal-Mart (WMT), a stock that's finally beginning to show some signs of life.

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