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NEW YORK ( TheStreet) -- The markets aren't as grim as they appear to be, Jim Cramer said on  Mad Money Tuesday. In fact, the markets are presenting a buying opportunity at current levels, but only if you know which stocks to buy.

In a market where all news is treated as bad news, Cramer admitted there are still some big pitfalls that must be avoided. Oil prices are not done going down, he said, and that means the oil stocks aren't done either. There's no reason to own the oil stocks yet and no hurry to buy them either.

The financials are another worrisome sector, Cramer said. Low interest rates hurt earnings. But while stocks like Wells Fargo (WFC) may indeed disappoint this quarter, this stock, unlike the oils, may not have much further to fall.

Then there are the companies that actually benefit from lower oil prices, stocks like chemical maker PPG (PPG) and retailer J.C. Penney (JCP) , which surprised the markets with strong results. Cramer said both of these stocks are buys into weakness.

Yes, there is some profit-taking going on along with some terrible earnings, Cramer concluded. But the world is not ending, and that means that for most stocks low interest rates and low inflation only make the stocks more attractive as they fall still lower.

10 Best Biotechs to Buy

The biotech stocks have been among the best performing stocks for the past four years, Cramer told viewers. Last year, the group soared 33%. Could 2015 rack up more big gains for these high fliers? Absolutely.

Cramer explained that many biotech companies used to be one-trick ponies, living or dying on a single FDA approval or rejection. But that's all changed. Many biotechs have moved from single drugs to drug platforms that can discover multiple drugs with a single technology.

Isis Pharmaceuticals (ISIS) remains the poster child for successful drug platforms, Cramer continued. This company's technology is now being used to discover treatments for multiple genetic abnormalities.

What about the rest of the high-flying biotechs? Cramer said Ovascienceundefined was the best performer last year, up 383%, and this company continues to show promise. Coming in at numbers two and three were Agios Pharmaceuticals (AGIO) and Bluebird Bio (BLUE) , up 367% and 337%, respectively, in 2014. Cramer is also bullish on these stocks.

Continuing down the top 10 best performers are Receptos (RCPT) , TG Threapeutics (TGTX) , Prosensa (RNA) , which is being acquired, and Achillion Pharmaceuticals (ACHN) , which has a promising hepatitis-c franchise.

Cramer is also bullish on Amicus Therapeutics (FOLD) , PCT Therapeutics (PTCT) and Esperion Therapeutics (ESPR) .

These Stocks Are Real Dogs

With a new year upon us, Cramer continued his annual ritual of looking into the worst-performing stocks of last year, the "Dogs of the Dow," to see if any are worth owning.

Coming in at number eight is McDonald's (MCD) , a stock Cramer owns for his charitable trust, Action Alerts PLUS. Cramer said this company needs to clean up its act or fire its CEO, and he expects one of those two to happen in 2015 -- which is why he has a $110 price target.

At number seven is AT&T (T) , which like number five on the list, Verizon (VZ) , is in a price war with other carriers. Cramer said he likes AT&T for DirecTV (DTV) and gives it a $38 price target, but thinks only Verizon can pop another $3 for the year.

Boeing (BA)  is at number six. Cramer gave this company a $150 price target even though investors appear to be bored with Boeing's defense and European exposure.

Fourth is Exxon Mobil (XOM) , with rival Chevron (CVX)  second. Cramer saw more pain for both these oil giants. Between the two is General Electric (GE)  at number three. Cramer sees a lot of upside for GE.

However, his biggest disappointment of 2014 is IBM (IBM) , a company seemingly without a strategy and nothing to propel it higher.

Off the Charts

In the "Off The Charts" segment, Cramer went head to head with colleague Ed Ponsi over the chart direction of the markets as the bull market enters its sixth year.

Ponsi looked at the markets through a different prism than Cramer, a political one. He noted that from 1833 through 2012 the market during the third year of a U.S. presidential term has yielded, on average, 10.4%. That compares to an average market return of only 1.9% during a president's first year. In fact, the last time the markets fell during a presidential third year was 1939.

Ponsi also looked at the political makeup, noting that from 1949 through 2011, when there's a Democratic president and Republican Congress the markets average a 19.5% return. Flip that around and the markets typically see just a 4.9% gain.

Cramer said he agreed with Ponsi's non-traditional analysis, noting that with bond yields still nonexistent around the globe, U.S. stocks like AT&T, with its 5.6% yield, should continue to propel the averages still higher in 2015.

Lightning Round

In the Lightning Round, Cramer was bullish on Walgreens (WAG) , Rite Aid (RAD) and CVS Health (CVS) .

Cramer was bearish on Integrys Energy Group (TEG) , Navios Maritime Partners (NMM) , Tesla Motors (TSLA) and The Bank of Ireland (IRE) .

No Huddle Offense

In his "No Huddle Offense" segment, Cramer offered up some facts about what lower oil prices means for our economy.

Cramer said that only 16 states benefit from higher oil prices and only 10% of the U.S. population lives in those states. That means for 290 million Americans, lower oil prices are a good thing.

While it's true that 12% of the companies on the S&P 500 index are oil or oil-related, for the other 88% of the index earnings estimates need to go up, not down, as a result of this tax cut on consumers.

Cramer said some oil companies may default on their riskier bonds but most companies are in good shape and most banks can easily handle any defaults that may come. Lower oil prices will not kill off the Texas banking sector.

Finally, Cramer noted that lower prices won't stay around forever. The velocity of the decline is frightening, he admitted, but investors need to see it through.

To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.

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-- Written by Scott Rutt in Washington, D.C.

To email Scott about this article, click here: Scott Rutt

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At the time of publication, Cramer's Action Alerts PLUS had a position in MCD and WAG.