Cramer's 'Mad Money' Recap: Get Ready to Sell

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"The important take-away from today is not Treasury Secretary Henry Paulson or Securities and Exchange Commission Chairman Christopher Cox" but that rallies are for selling, Jim Cramer told viewers of his "Mad Money" TV show Friday.

Cramer said the astonishing 779-point rally over the past two days can only mean one thing: sell.

He advised viewers to spend this weekend evaluating their portfolios so that they are ready to sell their bad stocks on Monday and take profits on the winners.

Cramer returned to a selling strategy he's used many times. He said to rank every stock in a portfolio from one to four. One's are the stocks you'd buy right now. Two's are those you'd buy on a pull-back. Three's are those you'd sell into strength. Four's are those you need to sell right away.

After ranking all the stocks in your portfolio, Cramer advised selling 20% of your portfolio on Monday. He said that there should not be many stocks still ranked "one," after the huge rally the past two days.

Cramer recommended taking profits in stocks like Wells Fargo (WFC Quote), which he recommended on July 21 at $27 a share, but is now trading at a 52-week high of $39.50.

He also recommended taking profits in US Bancorp (USB Quote) and Zion's Bancorp (ZION Quote).

Cramer told viewers to consider selling stocks in other sectors such as natural gas, technology and retail that have been up huge since Wednesday. For example, Target (TGT Quote), is a good candidate to trim, he said.

As for things to buy, Cramer said he likes Clorox (CLX Quote) should report a good quarter and be a good defensive play.

Cramer's Game Plan