Please enjoy this free sample of our premium content featuring Jim Cramer. To get all of Cramer's premium content free for a limited time, please register here.

NEW YORK (

RealMoney

) -- Is there anything more telling than the destruction of gold right now? It tells you the hedge funds are positioned wrongly, and are furiously liquidating, as the dollar gets stronger and deflation is in the air.

What to do? First, let's have some perspective: Gold is up 34% year over year. To me that means profit-taking is in order, as the price is still very elevated. I know I am a gold bull, but even bulls can't be blind to the possibilities of a decline after that kind of run.

Second, remember who owns a lot of gold. Right now some fund managers who could face liquidations are in big. They may have to go out big.

Third, gold's been rising for 10 straight years. Could it take a breather? Holy cow -- why not?

What to do? I say wait until you see the whites of the gold sellers' eyes. Let's call it $1,500 per ounce for now.

TheStreet Recommends

Then come right back in.

I'm still a gold bull long-term. I'm just way too cognizant of how people have to sell gold, like everything else, and I don't want them to knock me back while they run out the door.

At the time of publication, Cramer was long IAU.

Gigantic decline to a not-quite-oversold position followed by a meager increase in the futures. And no substantive change in Europe. Oh, well.

This is precisely why I wanted our markets to sell off more. There is no self-fulfilling prophecy of European action based on a minor stock selloff. That's not a wake-up call to anything. And it is Europe that has to take action, because we can't and everyone knows it.

We were going to do fine this year if the sluggishness was contained just to the United States. But when it went to Europe the markets were overwhelmed. One of the two of us has to get better or we can't advance and will most likely decline.

So, the idea that we can just quietly buy this market today and think it is all clear without further downside, perhaps to a level that could be as low as, say, 1010 on the S&P, to throw out a bandied level, seems fanciful.

I am always taking heat for liking a sector and then when the facts change not liking it. Basically you should NEVER like a sector then. Because facts do change.

But nothing changed last night in Europe. So what's the point of getting positive?