Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.
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 - Get Report) and Target (TGT - Get Report). 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 - Get Report) 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 - Get Report) lockup expired. Priceline's (PCLN) purchase of OpenTable (OPEN) created even more covering of short positions in e-commerce stocks.
Cramer says he was trashed recently for suggesting Tesla (TSLA - Get Report) could face increasing competition from the likes of BMW in the next three years. There are too many cheap stocks out there and he can't make a case for Tesla's valuation.
He feels the same way about Amazon.com (AMZN - Get Report). He can't make a case for owning it because he knows so many companies with actual earnings per share that aren't expensive. It isn't traditional metrics driving many of these stocks now. That can cause problems, Cramer said.
What tech stocks does Cramer prefer? Google (GOOGL - Get Report), Apple (AAPL - Get Report) and Facebook (FB - Get Report) fit his criteria for strong earnings growth, good sales growth and inexpensive valuations based on the out years, which is why they are holdings in his charitable trust, Action Alerts PLUS.
The bottom line: Cramer knows many viewers want him to be more aggressive. At this point, if you want to stay profitable, it's a time to exercise prudence.
A Turnaround Story
Royal Dutch is an oil/gas business worth the scrutiny, Cramer said. He is a huge fan of oil and gas companies primarily based in the U.S., but Royal Dutch Shell is appealing as a turnaround story.
Big, integrated oil companies can seem like "pitiful, helpless giants." Shell has had its faults, including cost overruns on expansion projects and disappointing refining output, Cramer said.
Cramer welcomed the new leadership of CEO Ben van Beurden, a 30-year company vet who took over in January and has been doing everything right thus far. He plans to improve financial performance and capital discipline seems to be taking hold.
Cramer sees some bumps in the road with Shell's plan to sell off assets, but at the same time he's confident the company will invest the cash in buybacks or additional hikes to its dividend.
Royal Dutch Shell is paying investors a huge dividend to wait for its turnaround Cramer said.
Executive Decision: Gary Burnison
In the "Executive Decision" segment Cramer sat down with CEO Gary Burnison of Korn/Ferry International (KFY - Get Report), the world's largest executive search firm. Shares got knocked down 4% by Tuesdays close despite an earnings beat. The stock had rallied 49% since Cramer last spoke to Burnison 11 months ago.
Cramer said that despite the quibbling over the company's earnings per share and a tax benefit that kept the number positive, this is still a high-quality company that offers a good entry point right now.
Burnison said Korn/Ferry is very much cyclical company and the company is investing. Revenue from Korn/Ferry's leadership and talent consulting unit rose 10% from the previous year.
Energy is hot, Burnison said. Automotive is very good. Aerospace is good. Despite some setbacks in natural resources given events in China, he sees nice improvement sequentially in the industrials business.
In the Lightning Round, Cramer was bullish on Crown Castle (CCI - Get Report), Westlake Chemical (WLK - Get Report), Amerigas (APU), Chicago Bridge & Ironworks (CBI), Celgene (CELG - Get Report) and Mylan (MYL - Get Report).
Off the Tape
In his "Off the Tape" segment, Cramer talked to Andre de Fusco, CEO of Cynvenio Biosystems, a private company founded six years ago focused on tailoring cancer treatments to the needs of individual patients at the genetic levels.
The company's noninvasive blood test can pair cancer patients with the best targeted therapy for their tumor, de Fusco said. This treatment gives doctors a window on how to treat patients at the molecular level. The tests are risk-free to patients and offer no false positives.
Most anti-cancer agents are ineffective three-quarters of the time, de Fusco said. This is a way to personalize each treatment to see how a tumor is evolving and might respond to a new drug.
To watch replays of Cramer's video segments, visit the Mad Money page on CNBC.
To sign up for Jim Cramer's free Booyah! newsletter with all of his latest articles and videos please click here.
-- Written by Chris Sahl in Boston.