NEW YORK ( TheStreet) -- With the Dow Jones Industrial Average hitting a new high for the year, Jim Cramer donned his doctor's lab coat and told viewers of his "Mad Money" TV show that he was going to take the pulse of the market to see whether it was truly healthy. The checkup consisted of 10 tests that Cramer said he's been using for years to take the temperature of an illusive market. This is what he saw: 1. A Rally in Transports. Cramer said this is important because the transports represent the movement of goods and people. If the transports are rallying, commerce is picking up, he said. 2. Strength in Banking. Cramer said our economy runs on credit, so a rally in the banking index means that credit conditions are improving.
Drexler's Magical Touch"Sometimes learning about the stories behind the products matters as much as pouring over balance sheets and earnings estimates," Cramer told viewers. He said sometimes the subjective side of investing is just as important as the analysis. Such is the case with retailer J. Crew ( JCG). The company reported a blowout quarter last Tuesday, but Cramer said it was even more telling to listen to the company's conference call, and hear 10 of 16 analysts congratulating CEO Mickey Drexler on a terrific quarter. Cramer said Drexler is a master when it comes to his conference calls. The CEO drove home the point that consumers are more savvy than ever, demanding value and quality, two things that J. Crew is passionate about. Drexler said that J. Crew creates demand that people talk about, and that's how the company constantly connects with its customers. Cramer noted that J. Crew is "out-producting" its competitors by making lasting products that consumers really love. The company is also making its stores easier to shop at, furthering its brand loyalty. Cramer said J. Crew is also expanding into wedding stores and men's apparel in a big way, with Drexler proclaiming that "the era of expensive men's suits is over." With the stock of J. Crew up 386% from its lows of 2009, Cramer said J. Crew is most definitely a buy.
Am I Diversified?Cramer spoke with callers to see if their portfolios have what it takes. The first caller's portfolio included McDonald's ( MCD), AT&T ( T), Johnson & Johnson ( JNJ), Cisco ( CSCO) and Walt Disney ( DIS). Cramer said "holy cow," this portfolio is perfect. The second caller's top holdings included Apple ( AAPL), Wells Fargo ( WFC), Vale ( VALE), Exelixis ( EXEL) and Citigroup ( C). Cramer said this portfolio had two banks and advised selling Wells Fargo in favor of an industrial company. The third caller had Bank Of America ( BAC), Suntech Power ( STP), RF Micro Devices ( RFMD), Petrobras ( PBR) and Nordic American Tanker ( NAT) as their top five stocks. Cramer said this portfolio was also well done. The fourth caller's top stocks were Hi Tech Pharmacal ( HITK), Aflac ( AFL), Plum Creek Timber ( PCL), J.M. Smucker ( SJM) and Exxon Mobil ( XOM). Cramer also blessed this portfolio as diversified.
Mad MailCramer followed up on NSTAR ( NST), a stock that stumped him in last night's Lightning Round. Cramer blessed the stock, saying that as Massachusetts' largest utility, it has a great dividend yield and should be immune to proposed carbon legislation. Cramer told another viewer that he'd take some profits in Clean Energy Fuels ( CLNE) and Westport Innovations ( WPRT) after their big runs, but he's still bullish on both companies.
Lightning RoundCramer was bullish on Prosperity Bancshares ( PRSP), Cree ( CREE), Windstream ( WIN), Tupperware ( TUP), AT&T ( T) and New Alliance Bancshares ( NAL). He was bearish on Intuitive Surgical ( ISRG), Frontier Communications ( FTR) and Sprint Nextel ( S). -- Written by Scott Rutt in Washington D.C. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.