Cramer's 'Mad Money' Recap: Rally on Hold (Final)

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NEW YORK ( TheStreet) --"It was terrific that we bounced off the lows today, but we're not out of the woods yet," Jim Cramer warned the viewers of his "Mad Money" TV show Tuesday, as he encouraged them to stay defensive and stick with high-yielding stocks and a healthy portion of gold.

Cramer said there were a few bright spots in today's action, with stocks like Johnson & Johnson ( JNJ), along with ( AMZN), Chipotle Mexican Grill ( CMG) and Apple ( AAPL), a stock which Cramer owns for his charitable trust, Action Alerts PLUS, all ending higher. But in order to have a sustainable rally, Cramer revisited to his "rally checklist" from a few weeks ago.

1. Leaders back from vacation. Cramer said while President Obama is speaking later this week, there is still no leadership in Europe.

2. Bank stocks stabilizing. No end in sight here, said Cramer, especially with fresh lawsuits being filed.

3. A bottom in tech. Cramer said a bottom is likely another two weeks away for this troubled sector.

4. More mergers. Cramer noted that there's been some, but not nearly enough.

5. Lower stock and gold prices. Prices are lower, but also not nearly enough to sustain a rally.

6. European banks raising equity. No, no progress here either, said Cramer.

7. Lower oil prices. Cramer said the price of Brent crude is still far too high.

8. China stops raising interest rates. There's still no all-clear signal from the Chinese yet, noted Cramer.

9. Euro gets a makeover. Solutions to fix the Euro are still illusive, said Cramer.

10. More new highs. Some defensive names are making highs, but not the high-growth names the market needs.

So with little to no progress on this list, Cramer said there's no way the markets can sustain any meaningful rally.

To Performing Stocks

"The market may be horrible, but there are still fantastic opportunities," Cramer reminded viewers as he examined the top performing stocks since the market lows of 2009. He said stocks like these should remind investors that when solid companies fall out of favor, they can still deliver remarkable returns.

While the S&P 500 has risen 76% since the lows of 2009, auto parts maker Dana ( DAN) has returned 5,200%, which puts it at No. 4 on Cramer's list of top performers. Cramer said Dana proves the power of turnaround and how even a company that declares bankruptcy can make a comeback.

Third on Cramer's list was Jazz Pharmaceuticals ( JAZZ), up 6,642% from it's lows. Cramer said a $310 investment back then would have be worth $20,900 today, as orphan drug makers like Jazz, BioMarin Pharamaceuticals ( BMRN) and Pharmasset ( VRUS) have virtual monopolies on their markets.

Coming in as runner-up was Pier 1 Imports ( PIR), up an astounding 7,173% from its 2009 lows. A $75 investment back then would be worth $5,455 today, said Cramer, as Pier 1 proves that executing on a substantial improvement plan can make all the difference.

Finally, topping the list was Dollar Thrifty Automotive ( DTG), which delivered an 8,326% return over the past two and a half years. Cramer said Dollar Thrifty teaches us about how scarcity can create a huge premium when it comes to takeovers. Cramer said Zipcar ( ZIP), down some 27% from its recent IPO, is also an attractive play in this space.

Of all of these big winners, Cramer said Pier 1 would be the one to own today, as the company is still executing on its turnaround plans and has yet to realize its full value.

Stellar Stocks

"You can still find individual stocks worth owning," said Cramer, as he continued looking back at history, this time towards stocks that have outperformed over the past five years after the markets have remained flat.

In the fourth position was travel destination ( PCLN), which rose 1,475% over the past five years. Cramer said Priceline is simply a better way to save money and the company now dominates its industry.

Coming in third was Questcor Pharmaceuticals ( QCOR), another orphan drug maker. Questcor has delivered a 1,576% return over five years, meaning investors could have turned an $835 investment into $10,000, even after selling half their shares as the stock doubled.

In second place, China's Baidu ( BIDU), was up 1,698%. Cramer said buying 500 shares of Baidu for $3,900 would have netted $34,688 after selling half your shares after they initially doubled. He said Baidu has been the only Chinese stock worth investing in, and still is.

Finally, getting top honors was Green Mountain Coffee Roasters ( GMCR), whose Keurig coffee brewers have revolutionized coffee making at home. Shares of Green Mountain are up 3,585% over the past five years. A $1,400 investment would be worth $25,750, after selling half on the first double. Cramer said the Keurig is as important as the microwave or cell phone and this company is not done growing.

A Bullish Technical View

In the "Off The Charts" segment, Cramer went head to head with colleague Ed Ponsi over the health of the overall markets.

According to Ponsi, a weekly chart of the S&P 500 shows limited downside risk from current levels, as the index has strong support at the 1,123 level, a level which has been challenged and held multiple times. Ponsi also sees additional support at the 1,100 level as well.

Turning to a daily chart, Ponsi also noted that the index has been making higher highs with its rallies in both August and September. He said this double bottom pattern is extremely bullish, especially if the index can rally back above 1,205.

Cramer said he respects Ponsi's contrarian view on the markets and perhaps the bears have a little more to fear than they realize.

Lightning Round

Cramer was bullish on Caribou Coffee ( CBOU), Starbucks ( SBUX), Philip Morris International ( PM) and El Paso Pipeline Partners ( EPB).

He was bearish on Skyworks Solutions ( SWKS), SandRidge Energy ( SD), General Motors ( GM), Dunkin Brands ( DNKN) and Vector Group ( VGR).

Closing Comments

In his "No Huddle Offense" segment, Cramer wondered why gasoline costs so much. He called on the U.S. government to investigate why Brent crude prices are now $25 a barrel higher than its domestic west Texas intermediate (WTI) equivalent and why U.S. refiners have opted to use the higher Brent prices despite the fact that one half of our oil is domestic.

Cramer said there are many questions to be asked here, such as whether ETFs are now controlling the markets, or whether speculators are keeping oil off the markets to manipulate prices. He said the loss of Libyan oil is often cited for the discrepancy, but the world has added more capacity than Libya ever produced and world is in a global slowdown.

Cramer said it would be foolish to assume that these price differences and practices are on the up and up.

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

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At the time of publication, Cramer was long Apple.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money."

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