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Jim Cramer said that 708 new highs on Tuesday can't be wrong. That's how many stocks hit new 52-week highs today.

"And this is just the start," he told viewers of his "Mad Money" show on CNBC.

Indeed, he said that unusual groups are co-existing in this market -- oil, retail, technology, etc. "The unusual confluence should be celebrated," he said.

Meanwhile, Cramer cautioned viewers not to fall in love with pretty faces on Wall Street. Hollywood stocks like DreamWorks ( DWA) and Warner Music Group ( WMG) are examples, Cramer said, of companies that put on a pretty or hip face but don't have anything inside. There is more than just an exterior, Cramer said. There has to be something on the inside. And that's called the fundamentals.

Fact is, investors who fell in love with stocks such as DreamWorks and Warner Music had nothing to fall back on when parts of their businesses started to fall apart.

The takeaway, then, is that you want to own a stock with something on the inside. That's why you want to own technology stocks, Cramer said. You want to own tech names such as Microsoft ( MSFT - Get Report), Cisco Systems ( CSCO), Motorola ( MOT), LSI Logic ( LSI - Get Report), Skyworks Solutions ( SWKS) and Corning ( GLW).

You buy these, Cramer said, because the fundamentals are solid. To reiterate: Buying stocks because they are hip does not make you money. You should like stocks for real reasons, Cramer said. "Look past the shallow surface to see what works."

A caller asked Cramer if it's time to sell the large media stocks and buy the more specialized firms. Cramer said that the big media companies -- Time Warner ( TWX), Viacom ( VIA.B) and Disney ( DIS) -- are hard luck stocks right now, but investors should stick with them.

As for the drug stocks, especially the companies that are providing cancer drugs, Cramer said that you don't get scared of them until the HMOs stop paying for the drugs. The HMOs, Cramer said, might eventually stop paying for the drugs, but probably not anytime soon. As a result, he said that investors should not be afraid of high drug prices. As such, stay with stocks such as Genentech ( DNA) and Novartis ( NVS).

Cramer also spoke with Susan Demond-Hellmann, president of product development at Genentech. She outlined the company's prospects, and Cramer said that at $85 a share, Genentech is still a bargain and he would be a buyer here.

Finally, markets commentator Herb Greenberg said he is keeping his eye on Urban Outfitters ( URBN - Get Report), a company he recently wrote negatively about. It's currently on his yellow flag list -- a stock to watch, Greenberg said.

Greenberg also said that he continues to think that investors need to be careful with Marvel Enterprises ( MVL).

Cramer said that he wouldn't sell either of them, despite Greenberg's caution. As long as they are yellow-flag stocks, Cramer said that he's not a seller. There's no reason to take any action on either stock, Cramer said.

Cramer treated viewers to two Lightning Rounds on Tuesday night.

Lightning Round 1: Bullish

In the first round he was bullish on: First Marblehead ( FMD), DayStar Technologies ( DSTI), Sepracor ( SEPR), McCormick & Co. ( MKC), Broadcom ( BRCM), Marvell Technology ( MRVL), Oceaneering International ( OII - Get Report), ITT Educational Services ( ESI), Healthcare Services Group ( HCSG), Titanium Metals ( TIE), THQ ( THQI), GameStop ( GME), Amylin Pharmaceuticals ( AMLN), Autodesk ( ADSK - Get Report), Adobe ( ADBE), Fortune Brands ( FO), Cytec Industries ( CYT), Automatic Data Processing ( ADP - Get Report), Schering-Plough ( SGP), Abbott Laboratories ( ABT), Johnson & Johnson ( JNJ - Get Report), Intuitive Surgical ( ISRG - Get Report), Michaels Stores ( MIK - Get Report), Dick's Sporting Goods ( DKS), Research In Motion ( RIMM), Calpine ( CPN) and Annaly Mortgage ( NLY - Get Report).


He was bearish on: International Flavors & Fragrances ( IFF), Charles River Labs ( CRL), Doral Financial ( DRL), Intrado ( TRDO), Coffee Holding ( JVA), Aastrom Biosciences ( ASTM), Credit Suisse Group ( CSR), ADC Telecommunications ( ADCT), LaBarge ( LB - Get Report), Alaska Communications ( ALSK), Taser International ( TASR), J.P. Morgan Chase ( JPM - Get Report), Bottomline Technologies ( EPAY), Taro Pharmaceutical ( TARO - Get Report) and Arizona Land Income ( AZL).

During the second Lightning Round, Cramer was bullish on:

Lightning Round 2: Bullish

Microtune ( TUNE), Boeing ( BA - Get Report), Microchip Technology ( MCHP - Get Report), SonoSite ( SONO), Citigroup ( C - Get Report), Cimarex Energy ( XEC - Get Report), Lucent Technologies ( LU), Micron ( MU - Get Report), Serena Software ( SRNA), People's Bank ( PBCT), Shuffle Master ( SHFL), Commerce Bancorp ( CBH - Get Report), Given Imaging ( GIVN), Syneron Medical ( ELOS) and Burlington Resources ( BR - Get Report).


Cramer was bearish on: Informatica ( INFA), Intrawest ( IDR), Corinthian Colleges ( COCO), Aeroflex ( ARXX), Tibco Software ( TIBX), ( OSTK - Get Report), U.S. Steel ( X - Get Report), Global Crossing ( GLBC), Exxon Mobil ( XOM - Get Report), Cell Genesys ( CEGE), Vineyard National Bancorp ( VNBC), Bank of America ( BAC - Get Report), Flextronics ( FLEX), Candela ( CLZR), Laserscope ( LSCP), IAC/InterActiveCorp ( IACI) and FedEx ( FDX).

Interested in more Cramer? Check out Jim's rules and commandments for investing from his latest book by clicking here. It's a series of articles from Cramer on how to become a better investor. The following table lists some of the rules that Cramer dissects.

1. Pigs Get Slaughtered 2. It's OK to Pay the Taxes
3. Don't Buy All at Once 4. Buy Damaged Stocks
5. Diversify to Control Risk 6. Do Your Homework
7. Don't Panic 8. Buy Best-of-Breed
9. Defend Some Stocks 10. Don't Bet on Bad Stocks
11. Own Fewer Names 12. Cash Is for Winners
13. No Regrets 14. Expect Corrections
15. Know Bonds 16. Don't Subsidize Losers
17. No Room for Hope 18. Be Flexible
19. Quit When Execs Do 20. Patience Is a Virtue
21. Be a TV Critic 22. When to Wait 30 Days
23. Beware the Hype 24. Explain Your Picks
25. Find the Bull Market
Check back for more of Cramer's Rules

At the time of publication, Cramer was long Boeing, Cimarex, Commerce Bancorp, GameStop, J.P. Morgan Chase, Lucent and Motorola.

James J. Cramer is a director and co-founder of He contributes daily market commentary for's sites and serves as an adviser to the company's CEO. Outside contributing columnists for and, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict."