RealMoney Radio Recap: Fake Out

"The same stocks that were up so beautifully at the end Tuesday are down so hideously today," Jim Cramer said on his "RealMoney" radio show Wednesday.

This is going to be a down week, he said, but yesterday's fake-out rally sucked a lot of people in. While some people want to get into stocks as they go up, Cramer said he recommends getting out when stocks go up and getting in when they go down.

Cramer said he advocates selling strength and buying weakness. People need to stay diversified, play defensive, buy consumer stocks and not be aggressive, he said.

In this market, which is difficult to fathom, Cramer said to buy Pepsi(PEP Quote), Eli Lilly(LLY Quote) and maybe Altria (MO Quote), which he owns for his charitable trust, Action Alerts PLUS.

In addition, he suggested soup, cereal and soap stocks for people who want to protect themselves. If you are able to take the pain, hold on to the basic companies that people can't ignore, he said.

"Know your time frame and your pain tolerance and work around it," he advised.

Vice Is Nice

The casino stocks are kind of like the tobacco stocks, Cramer told one of his callers. They're both vices that people can't stay away from, he said.

Cramer said he can't be against someone who wants to ring the register on Las Vegas Sands (LVS Quote) since it is up so high, but even if it came down three or four points he said he would be tempted to pick some up, not throw some away.

Cramer told a caller to wait until RadioShack (RSH Quote) goes to $15 to buy half, and then buy the other half when the company announces what he expects will be a pretty bad quarter, he said. RadioShack was recently at $16.75.

When a listener inquired about Crystallex (KRY Quote), which has a giant gold mine in Venezuela, Cramer said to hold it for now, then buy more when it goes down to $2.50 and ring the register at $4.50 to $5.