Cramer's 'Mad Money' Recap: Market Takes a Breather (Final)

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NEW YORK ( TheStreet) - "This market's run out of gas," Jim Cramer told the viewers of his "Mad Money" TV show Monday.

He said regardless of what happens with the rest of earnings season, the market is getting ready to take a breather.

According to Cramer, there's only one explanation for why great earnings from companies like Corning ( GLW), Verizon ( VZ) and Honeywell ( HON), a stock which Cramer owns for his charitable trust, Action Alerts PLUS , were met with selloffs. "The markets have gone up as far as they can" and now they're overbought and poised for a 3% to 5% decline, he said.

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Cramer said that he expects a gradual selloff, and not a vicious one. He said that since money managers are still not fully invested, the big money will still be buying in and providing a cushion as the markets decline.

Where to invest? Cramer said he's put his money in banks like Wells Fargo ( WFC) and Bank Of America ( BAC), two stocks which Cramer owns for his charitable trust, Action Alerts PLUS . The banks haven't done much recently, said Cramer, and it's hard for them to disappoint.

Cramer said he'd also look toward healthcare stocks. He said this group, which is underinvested by money managers, should have room to run. Cramer likes Abbott Labs ( ABT) and Bristol-Myers Squibb ( BMY), two more Action Alerts Plus names.

Cramer had words of caution for the rails and industrial stocks, two groups which had big runs, and will be vulnerable to the selloff. He said he'd also said to stay clear of the retailers, and even some technology stocks, as he expects all of them to drift lower before regaining their momentum.

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