NEW YORK ( TheStreet) -- Taking a page from his cookbook, Jim Cramer told the viewers of his "Mad Money" TV show Tuesday that the recipe for today's market rally included four primary ingredients: Ben Bernanke, consumer confidence, housing prices, and the retail investor. Donning a chef's hat and apron, Cramer was baking a cake to celebrate the rally. He said there's a lot to celebrate in the markets, not the least of which is Ben Bernanke. Cramer said while he was initially a critic of the slow moving Bernanke, Cramer credited him with keeping the ATMs at our local banks full of cash and taking radical actions to stabilize the markets and our country's financial system.
Fundamental PatternIn the "Off the Charts" segment, Cramer showed viewers how to look for a pattern that's sure to make them money. He said that the "completed basing pattern," coined by famed statistician John Bollinger, is a sure fire way to spot a stock that's headed higher. In a basing pattern, a stock tests, then retreats from a level multiple times, forming a "base" that it seemingly cannot penetrate. The base is "completed" once the stock finally breaks through this level, showing significant buying interest and strength in the name. Cramer said the completed basing pattern is one of the most fundamental patterns in stocks, and one that every investor should be able to recognize.
Global DemandWith commodity prices rising for minerals, Cramer took a closer look at Vale ( VALE), a stock which he owns for his charitable trust,
Duel of Warehouse KingsCramer continued his search for the king of the discount retailers, this time by pitting the two warehouse kings Costco ( COST) and BJ's Wholesale ( BJ) against each other to see which one rose to the challenge. Cramer said when comparing the warehouse stores, it's all about same-store sales. He said BJ's has the advantage, with sales up 2.9% in its most recent quarter, while Costco saw sales flat and down 1% in July. When it comes to inventory, Costco has the advantage and is doing a better job controlling its costs, he said. However when it comes to merchandising, who has the most appealing products, BJ's again takes the lead, he said. While Costco focuses on 4,000 different items in its stores, rival BJ's carries over 7,200 items, giving its customers more choices, in more sizes, than Costco, he added. Cramer said when it comes to expansion, BJ's also has more room to grow, and is stepping up its expansion plans to take advantage of better real estate prices. Cramer said while he prefers shopping at Costco, BJ's is the better stock. The company trades at just 12 times earnings, while Costco, often perceived as the higher end play, commands 18 times its earnings. Cramer said this notion could change, however, as BJ's simply runs its business better than Costco.