Reasons for This Rally: Cramer's 'Mad Money' Recap (Tuesday 9/18/18)

Those investors who see the world as a "glass half-full" continue to take the stock market higher, Jim Cramer told his Mad Money viewers Tuesday. And unless there's an overwhelming amount of negative news, it doesn't look like anything can stop them. Cramer said Tuesday was more like a glass that's totally full.

Even the latest salvo of tariffs and retaliations wasn't enough to keep stocks down, Cramer explained. That's because investors were fearing 25% tariffs, which made 10% tariffs seem like a win. The markets were further buoyed by the Chinese stock market, which was able to mount a rally.

But the main reason Cramer said the markets were able to rally was the constant flow of new money entering the market form index funds and IRAs. This trend has forced many short sellers to lose big on even the most obvious bets. Stocks simply want to go higher.

Cramer said there were also a number of positive research notes out, including on Oracle (ORCL) , which made lackluster earnings seem appealing.

Finally, Cramer said that FANG, his acronym for Facebook (FB) , Amazon (AMZN) , Netflix (NFLX) and Alphabet (GOOGL) , excluding Facebook, have all been on the move higher. So, too, have shares of Apple (AAPL) , a stock Cramer owns for his charitable trust, Action Alerts PLUS. Apple should be heading lower, but so far has avoided being in the eye of the tariff storm.

Cramer and the AAP team talk about Alphabet and Amazon revving up new auto-related services. Find out what they're telling their investment club members and get in on the conversation with a free trial subscription to Action Alerts PLUS.

Executive Decision: Tilray

For his "Executive Decision" segment, Cramer sat down with Brendan Kennedy, president and CEO of Tilray (TLRY) , the Canadian medical marijuana provider that saw its shares jump 28% today on news the U.S. Drug Enforcement Agency approved the import of the company's products for research purposes.

Kennedy explained that Tilray is already approved to import to other countries and he's thrilled to now be able to trial their products in the U.S. as well. He said the market for medical cannabis is $100 billion globally, as it can be used for many purposes from pain management to sleep aids and more. Cannabis is a great alternative to opioids, he added.

Turning to recreational uses, Kennedy said that every alcohol company will be exploring cannabis products at some point as the global opportunity is simply huge.

Kennedy admitted that Tilray does need additional capital to help finance their expansion plans. He said they continue to evaluate new sources of capital but haven't made any decisions as of yet.

Buying Opportunities: Splunk

When Wall Street underestimates a company, use that weakness to buy, buy, buy, Cramer told viewers. Case in point, the data analytics company Splunk (SPLK) , which has seen its shares fall from $128 two weeks ago to just $116 today.

The transition to the cloud remains the hottest secular growth story out there, Cramer explained, and just like Adobe Systems (ADBE) and Autodesk (ADSK) before it, Splunk is making the sometimes bumpy transition from charging big, one-time software license fees to smaller, recurring revenues.

This transition tends to baffle Wall Street analysts, who mistakenly associate falling revenues with slowing growth. This pattern played out with both Adobe and Autodesk. In the end, both companies have seen exploding growth.

Splunk is one of the few companies that can mine the treasure troves of unstructured data generated by today's enterprises, making it a must-have tool for fraud detection, cybersecurity and other applications. Cramer said the analysts are simply looking at the wrong metrics for Splunk, which is why the recent weakness is a gift for those looking to start a position in the stock.

Over on Real Money, Cramer offers more analysis on trade, tariffs and China. Get more of his insights with a free trial subscription to Real Money.

Executive Decision: Square

In his second "Executive Decision" segment, Cramer sat down with Sarah Friar, CFO of Square (SQ) , the financial services provider with shares that are up 150% for the year.

Friar said that Square is growing at 60% per year and has seen accelerating growth for the past five quarters in a row. The company is hard at work developing products to make sure they're always there for merchants to make a sale, whether that's online, in person, person-to-person and beyond. The company is also expanding internationally and has a presence in Canada and the U.K.

Friar added the Square aims to make elegant products that are full-featured and fully integrated for a seamless experience. For example, the company's payroll system runs from time cards to paychecks autonomously. Meanwhile, Square's Caviar food service platform can facilitate food ordering whether customers are in line, online, looking for pickup or looking for delivery.

Square also has a small business lending program that's made 500,000 loans totaling $3 billion with a default rate of just 4%. Friar said that low rate comes from the data they have on their customers from accepting payments and knowing their cash flows.

No-Huddle Offense

In his "No-Huddle Offense" segment, Cramer answered the question, "Who has more to lose in the trade war?" In a word, China.

Cramer said it's simple arithmetic. China exports three times more to us than we do to them. Plus, our economy is consumer-based, while theirs is manufacturing based. We can make things in other countries, but China can't sell as many goods to other countries.

China can't hurt us without also hurting themselves.

Lightning Round

In the Lightning Round, Cramer was bullish on Biogen Idec (BIIB) , Regeneron Pharmaceuticals (REGN) , Amgen (AMGN) , Delta Air Lines (DAL) , United Continental (UAL) , Southwest Airlines (LUV) , Nike (NKE) , VF Corp (VFC) and Delek Holdings (DK) .

Cramer was bearish on Liberty Oilfield Services (LBRT) , Spirit Airlines (SAVE) , The Chefs Warehouse (CHEF) , Under Armour (UAA) , GameStop (GME) and Caesars Entertainment (CZR) .

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At the time of publication, Cramer's Action Alerts PLUS had a position in GOOGL, AMZN, FB, AAPL AMGN.