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) 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) 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."

He believes that people will take advantage of what he called "an interesting opportunity" to buy Caterpillar at a very low multiple in 2007.

Further, he said he heard nothing on the Caterpillar call that was positive about housing.

"Housing and lenders in the subprime category will bottom only with the help of the Fed," Cramer said. "The idea that the glut will work itself off without government help is a misstatement of what will happen." He said his bullish thesis of a rate cut is predicated on the verdict that we will not see a bottom until we get government aid.

"The people who are propounding the thesis that the Fed can stay the same or raise rates are flying in the face of all history and I'm uncomfortable with doing that," Cramer said.

However, he does not believe it will happen until May because that will give enough time for Ben Bernanke to have been Fed chairman and for the Fed to see a year-over-year downturn in commodity prices.
At the time of publication, Cramer had no positions in stocks mentioned.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click here to order his book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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