NEW YORK (TheStreet) -- With markets down 3% from their highs, Jim Cramer told his "Mad Money" TV show viewers on Tuesday that it's all right to take some profits, trim back some positions and wait for signs that the markets are improving before buying in.
He said that the markets have changed for the worse since last week and investors need to adjust accordingly.Cramer said he had no idea last week that tensions with Iran could worsen, Greece could inch even closer to default and China could slow down even more, but indeed, all three of these events have happened. Cramer said he's now more skeptical of a peaceful solution between Iran and Israel, and that could send oil prices to all-time highs and dent corporate earnings. He said the markets aren't equipped for a full-on gas crisis. Then there's Greece, an issue we thought was put to rest, but is once again back on the table. Cramer called the situation "pathetic" and said investors need to watch gold prices, via the SPDR Gold Shares (GLD), and the Currency Shares Euro Trust (FXE), to quantify the effects of the lingering debt crisis on U.S. stocks. Finally, there's China. Cramer said he still thinks China's economy is slowing, not crashing, but with emerging markets across the board feeling headwinds, investors need to keep a close eye abroad. All of these things should just cause a market pause, or even a modest reversal, said Cramer, but if any of the three take a turn for the worse, then stocks will quickly become more expensive than we previously thought. That's why he advised raising cash and waiting for a better entry point.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV