thank you, mrs. lee, for sharing your son with us today. >> we like himlolo >> it's been a fun boozeday tuesday. bye! >> you need to get into the game. >> these firms are nuts. they know nothing. nothing. >> i always like to say there is a bull market somewhere -- >> "mad money" you can't afford to miss it. >> i'm cramer. and welcome to cramerica. other people are trying to make frie friends, but i'm trying to make you some money. it's my job not st to entertain, but i'm doing some teaching tonight. so call me at 1-800-743-cnbc. look. nobody said the stock market is going to be easy. it's dumb as a bag of hammers. slow as molasses. which at last is your edge. anything that idiotic can be gained by you at home, allowing you to capitalize even on days like today when the dow sank 83 points down 0.81% and the nasdaq

nose dived a full percent. how can we measure this market's obtuseness. what do i mean by this? we simply have to look at two charts. the chart of cummins, giant trucks, overlaid on the dow jones industrial average. take a look. yes, news out of this company drove this whole market lower, thanks to a midday release entitled cummins increases dividend by 25%, updates 2012 revenue outlook. hmm. how could that -- uh yo know, then boom, the whole market follows. at first glance, you have to expect some pretty good news here, right? cummins already played 40 cents a share in that dividend. now it's going to pay 50 cents a

share. you might have expected the stock to roar on the dividend boost, not plummet $8.53 to finish at $86.91. >> house of pain. >> i mean, we're head over heels on this show about dividend boosts. largely because of our anti-notorious b.i.g. philosophy of more money, fewer problems. remember, though, nothing is more important than the outlook. and i want you to think of this chart whenever you doubt me on that concept and cummins outlook, not awful, but seriously disappointing. so disappointing, before i tell you how you could have anticipated and side stepped this decline, not because i suggested you do that this very morn on "squawk on the street." i want to parse this statement to its fullest because it's a metaphor. it's not an analog, for what awaits us this huge earnings season that started unfolding last night at 5:00 p.m.

first, we get the glowing terrific news of the dividend raise, including a statement that, quote, with strong cash flow and low levels of debt, we are able to fund investments in our future growth and increase dividends to shareholders. wow, bravo! i'm panting for the stock after this. give me some cummins. all right, but then we get the boom. the wrecking ball. the one that took apart this whole stock market. stopped it right in its tracks. it's like kryptonite for superman, you know what i mean? first, i'm reading from the release, the company also lowered its full-year revenue outlook for 2012 and now expects 2012 revenues to be in line with 2011 compared to the company's previous guidance. cummins had a dynamite year last year. who cares if they can't beat it this year.

in this business, doesn't cut it. cummins, despite a smokestack flavor is a growth stock. cummins has outengineered everyone in the game, particularly navistar, which is a wreck because it can't make engines that comply with more rigorous air quality standards. while cummins breezes through the tests. so when a company suddenly says those revenues are going to be flat, you think like this, people. you've got to presume two things. one, the best of the best is struggling. but two, more important, the world must be slowing rather dramatically for this to happen. while the company followed this up by saying it doesn't provide earnings guidance, you can guess

it would cost cummins a buck per share. immediately. instead of panting, i could hear the three deadly words that constitute a stock obituary and i have traded stocks and written obituaries in my career. slashing numbers cummins. now, maybe a wrecking ball is all too soft of after description. maybe imploding dynamite that brings down the whole shooting match is a better description. here it goes. we have seen demand in some markets weaken recently as growth in the global economy has slowed. cummins sells its equipment through 6,500 dealers in 190 countries. that's a pretty sweeping territory. it's called the earth. the ceo is then quoted as saying trends for trucks and power generation equipment have softened and demand in brazil, china and india is not improving

as previously expected. hold it! hold the phone! we know the u.s. has been a little weak, but brazil, china, india? that's the b, c and i of bric, the acronym that stands for some of the fastest growing countries on the planet. there's no doubt on anyone's mind now that the whole world is slowing if the b, the c and the i of bric are tanking. that leaves the r, and russia, the r, cannot carry the world. then one last one. our revenues have been negatively impacted by the appreciation of the u.s. dollar against a number of currencies. oh, lordy. the dollar is just going up huge just this week. and things have only gotten worse, even today. that's it. here we go. 271 words. 271 little words of inelegant prose from columbus, indiana, took down your whole stock market. and why not? here's cummins, best of breed, the best of the best. taking market share from its principal competitor and they're

having a hard time. now you know the truth of what's happening out there in industrial america. in the industrial world, sure there was other negative news in the last hour. semiconductor firms and semiconductor manufacturers they both blew up. jcpenney announced sizable corporate layoffs, not long after credit suisse doubled its estimates for a second quarter loss. but hey, that could mean that intel, kla are killing it out there and jcpenney continuing its nasty spiral. you can't make that mental jump from cummins, though. they were the best. they weren't beaten by anyone. they certainly didn't shoot themselves in the feet. this is the surest sign of a global slowdown. today's decline was all on

cummins, especially since europe was up nicely last night that means we should see the earnings of all industrial international companies come down. that's why we aren't done selling off yet. now you've got a description, how do you make money off of it. was any of this shocking? no, that's so amazingly stupid about this stock market. it's where your edge comes in. you would have known this was going to happen suggested you sell kit pillar this very morning when it was still up. it was on alcoa's first conference call, all on that call last night. the fabulous ceo of this very difficult to manage company came out and said specifically the truck manufacturers, which is this because there really aren't any others, but they had

dramatically lowered their aluminum orders in the last quarter. he cited truck manufacturers, and every single reason, including china which he called out dramatically on the decline. plus it's going to get worse not better. he said sell cummins now. he didn't say it, he didn't have to say it. that's your and my job. cummins opened up! not down, but up more than a dollar. then it continued to rally all the way to $97.36. this is a stock that closed at $86.91. 10 points. you could have gotten out at a profit from yesterday. you could have then swapped out and put money in the five reception stocks. four of rallied nicely today. here's the bottom line, the market at times can be dumb as plywood, and you can beat it if you just do the homework. if you listen to alcoa, you've got an advanced copy of this release. basically that's what you got.

get out of cummins and a host of other industrials and had a chance to jump ship in what turned out to be a great opening of a bad day. but if you didn't listen, if you didn't do your homework as i suggest every night, then you're just as slow as the market itself. so how can you ever expect to beat it? let's go to brad in illinois. brad? >> caller: hey, jim. 25 years old. i've been watching your show every day. i've been waiting a long time to give you a windy city boo-yah. >> windy city chi-town boo-ya h-back at you. go ahead. >> i've got a question about ford and how the stock might be affected by the recent news out of alcoa. i know alcoa beat their quarterly expectations

yesterday. >> actually, it was somewhat upbeat about automobiles. that was the part of the conference call. that and gas lines weren't that big. however, he did talk about a strong dollar and he talked about weakness in europe. so you don't want to buy any ford off the call. but that was not as easily spelled out as the way he told you to sell, sell, sell, the truck manufacturers. and that means sell cummins. market is very stupid sometimes. but you don't have to be. and cummins is proof that outlook matters. "mad money" will be right back. coming up, face the charts. facebook will give investors a status update when it reports its first official quarter later this month. but tonight, cramer is turning

to the technicals to find out if you should invite it into your portfolio, when he goes "off the charts." plus, and the winner is -- cramer asked and you answered resoundingly on twitter. which second quarter all-star have cramericans used to hit it out of the park for the rest of the year? and jim is giving this one its greatest test yet. all coming up on "mad money." >> now that the market has had

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>> now that the market has had some time to digest the most disastrous ipo in living memory, is it finally okay to buy some facebook? well, you know the facebook doog deal was a fiasco in epic proportions, it soured regular people even worse than the flash crash and for good reason. there's a price for everything, even the most tarnished merchandise. the stock is now six points below where it came public and 10 points below where it opened

on the first day of trading. although you could say i'm late here, although it's fair to note the $31 stock has had a huge rally off its nasty bottom of $25 and change. but could facebook now ook which you willy be worth buying? a brilliant technician who is a strategic officer of t3 trading. let me just say, i am wary of going anywhere near facebook before it reports later this month. we have heard too many worries about a slow down in facebook's business, caused by users massively and quickly migrating to mobile devices in droves over the last two months, leading up to the deal because mobile has dramatically lower ad rates. my view is that it still might not be safe. after all the things that have already gone here now, the

prudent course is to wait and see the numbers. i would rather see something in the charts that makes them think the danger has passed and now it's time to buy facebook. here's a guy who had been embarrassed practically from the beginning. and that's why i think we have to take him seriously when he says the stock bottomed. that and he called the bottom in apple on this show a year ago. so why does redler think facebook is a buy? he says he now likes facebook for some of the reasons why he initially hated it. simple supply and demand. as in the supply of shares versus the actual demand of them. let me walk you through it. first, take a look at this shart chart, which shows you the first three days of trading in

facebook following the ipo. there are a ton of reasons why this deal was such a walking, talking catastrophe. but as redler sees it, you could have saved yourself misery and money by focusing on the supply of stock and demand shortly