Cramer's 'Mad Money' Recap: Euro Holds Key to Market (Final)

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NEW YORK (TheStreet) -- Investors looking to know which stocks to buy, and when, need to have the key, Jim Cramer told his "Mad Money" TV show viewers on Tuesday. But in today's markets, finding the key isn't always easy.

Cramer said that normally, with industrial production going up, he'd recommend Caterpillar (CAT). With demand for new building on the rise, normally steel maker Nucor (NUE) would be the go-to play. Consumer price inflation falling? Buy General Mills (GIS). Retail sales up? Buy retail. And so on.

But in today's market, Cramer said the key isn't any of those metrics, it's the CurrencyShares Euro Trust (FXE), a measure of the strength of the euro vs. the dollar.

Cramer recounted how as a young trader on the road, he'd only have time to ask one or two questions about how the markets were doing each day. THis trained him to find the key, the one stock that could tell him which was things were likely headed.

In the 1980s, that key was Pfizer (PFE), as the markets traded with the drug stocks. In the dot com boom, that stock was Yahoo! (YHOO), and in today's market, it's the FXE.

Cramer explained that all of Europe's woes can the summed up in the strength of the euro, which the FXE measures. When the euro is strong, U.S. markets have a good day. When it's weak, our markets tank. Cramer said he wishes there was more to it, but it's just that simple.

Cramer said all investors need to have the FXE in the top left corner of their screen, above the Dow Jones Industrial Average and above the S&P 500. As goes the FXE, he said, so goes the market, no matter how good the news here at home.