Jim Cramer's 'Mad Money' Recap: Don't Bet Against This Market

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NEW YORK (TheStreet) -- Tensions continue in Iraq, but Jim Cramer said on Mad Money Tuesday the markets may be sending a different message.

This was the first day where Cramer said he heard from investors the insurgents may have met their match. We saw the Dow and S&P 500 hold its small gains from June thus far, with the Nasdaq up more than 2%.  Cramer thinks the market  reacted in the right way.

It's a fluid situation, he added. Anything that affects the price of oil will hit the airlines and the big box retailers including Home Depot (HD) and Target (TGT). If the oil fields south of Baghdad remain as safe as they look today, these sectors are underpriced, Cramer said.

Tuesday also brought higher inflation data and news showing housing has yet to snap back despite better weather. You'd think that would be a recipe for lower stock prices. But this market has a mind of its own, and it won't let go for the entire session.

Cramer foresees a quiet market period on the way. Higher inflation means rates rise automatically; when that happens, banks go higher. Since we won't get any data on banks' performance for some time, investors might read the quiet data period as a sign that things are improving on higher rates.

If rates rise, financials can improve, Cramer said. If gas prices drop, retail stocks will benefit. This could frighten the bears and scare shorts into covering or buying in to their positions, Cramer said.

Institutional investors and hedge funds that bet against the market are in major trouble, Cramer concluded.

Taking a Second Look at Tech

Cramer has not been comfortable with a number of stocks that continue to rise. So, he said, it's time to take a second look.

Many are in technology, and Cramer says that's more risk than he likes. Salesforce.com (CRM) didn't go down after its latest quarter but higher, he noted, mainly because IPOs in the sector locked up. He didn't like the "deluge of insider selling" that peaked after the Twitter (TWTR) lockup expired. Priceline's (PCLN) purchase of OpenTable (OPEN) created even more covering of short positions in e-commerce stocks.

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