TheStreet.com TV Recap: Hold Your Fire

This was a good week to just sit back and watch the action but not make a lot of buying and selling decisions, Jim Cramer said on TheStreet.com TV's Wall St. Confidential Friday.

Although the market's seeing some selling, Cramer told Aaron Task, the host of Wall St. Confidential, not to succumb to the "trigger-happy" mentality of mutual funds and hedge funds; instead, he believes investors should use the market declines to get into stocks at their own prices.

But overall, Cramer said this was a good week to "step away," see how the companies are doing and then take action.

"People who are in the market this week and the other three weeks of the year that are pure earnings season are so easily whipsawed that it makes no sense to put money to work," Cramer said. "This week you must sit on your hands if you're going to outperform."

He said Microsoft (MSFT Quote) has become a core position, "where the future is brighter than the past." Also, CEO Steven Ballmer has become an executive who promises to deliver -- and then does so, Cramer said.

Cramer said he still believes Caterpillar (CAT Quote) is the key to the market.

The most interesting thing about Caterpillar is that it has gotten a "tremendous amount of credibility" by guiding down big, reporting a bad number and giving "superb" guidance, Cramer said. "Its bullishness is being rewarded with a nice bump up here."