Cramer's 'Mad Money' Recap: A Cautious Game Plan (Final)

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NEW YORK ( TheStreet) -- "We've lost the bright spot in our economy," Jim Cramer told the viewers of his "Mad Money" TV show Friday as reflected on today's unemployment number and the abysmal market action that followed.

Cramer said these markets warrant extreme caution, as positive U.S. economic news has been the only thing to counter the flurry of bad news emanating from Europe. With that positive news hitting a speed bump today, Cramer said the European contagion will continue to take our markets lower.

Making matters worse, Cramer said there's no new U.S. economic data on the horizon, creating a news vacuum that will make news from Europe seem even worse.

Cramer said he'd love to recommend Ciena ( CIEN) ahead of their earnings next week, and would love to get in on Pep Boys ( PBY) after AutoZone ( AZO) reported great numbers this week. But, he said, the reality is that Europe trumps everything.

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Instead, Cramer said he'll be focusing on the sovereign debt offerings from Portugal and Spain and the continued slide of the euro towards his $117 price target and probably even below. He told investors to stick with the most defensive strategy they can, by investing in high yielding dividend stocks, adding in a little gold and diversification.

Defensive Tactics

Still confused as to how to play next week's troubled market? Cramer offered three strategies to help cope with the pain.

First, Cramer said investors can keep the bat on their shoulders, to use a baseball analogy. He said the other team is pitching a no hitter with a weak China, a faltering Europe and now a stumbling U.S. Cramer said perhaps the best strategy is to simply do nothing and wait for a better pitch.

Second, Cramer said investors can bunt, continuing his baseball theme. He said investors need to remember that the markets are up from Dow 6,500, and now is still a good time to sell some stocks and take a little money off the table. "Don't give back any more of your profits," he said.

Finally, Cramer said investors can try hitting a few singles, buying into some accidentally high yielding stocks, like the myriad of names he recommended on last night's show. He said these stocks will come back harder and faster when the market turns around, and they yield more the lower they go.

As an example, Cramer used DuPont ( DD), a great company with a good balance sheet and solid management. Cramer said DuPont is yielding 5%, a great entry point. He'd buy a little now, then wait for the yield to hit 5.5% and buy more, and again at 6% and so on.

Cramer also gave the nod to other's he's recently mentioned, stocks like EastGroup Properties ( EGP) and Annaly Capital Management ( NLY), the latter of which currently yields 15%.

Pickens on Natural Gas

In a special interview, Cramer once again welcomed oil tycoon and natural gas advocate T. Boone Pickens to the show for an update on the American Power Act and the state of natural gas in America.

Pickens said that the American Power Act legislation is now in place and it will be passed, although not by Memorial Day as he originally predicted. He said President Obama is finally starting to understand that natural gas is the only fuel that can compete with diesel, and it's cleaner and American-made.

Pickens said that he not only favors natural gas but he favors any fuel that's American, including electric, solar and even ethanol -- anything except for OPEC oil.

When asked about the oil spill in the gulf, Pickens said that the relief well currently being drilled is the only real option for stopping the flow. He said the other things that have been tried are all long shots, and even the relief well may not stop it by August as expected.

Pickens said the important thing is to leave BP ( BP) alone until it stops the oil before taking steps to investigate what happened.

Mad Mail

Cramer told a viewer that while he likes Halliburton ( HAL), he can't recommend it until after the BP oil spill has been contained. "I don't need that headache," he said.

Cramer told another viewer that he likes Express Scripts ( ESRX) both before and after its stock splits in the coming days. "Don't worry about the split, it doesn't matter," he said.

Lightning Round

Cramer was bullish on JPMorgan Chase ( JPM), Altria ( MO), Time Warner ( TWX), Southwestern Energy ( SWN), Centurytel ( CTL), Windstream ( WIN)

and Vodafone Group ( VOD).

There were no bearish picks.

-- Written by Scott Rutt in Washington D.C.

To watch replays of Cramer's video segments, visit the Mad Moneypage on CNBC .

Want more Cramer? Check out Jim's rules and commandments forinvesting from his latest book by clicking here.

For more of Cramer's insights during the Lightning Round, clickhere .

At the time of publication, Cramer was not long on any stock mentioned.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for TheStreet.com, Inc., and CNBC, and a director and co-founder of TheStreet.com. All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of TheStreet.com or its affiliates, or CNBC, NBC UNIVERSAL or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither TheStreet.com, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or TheStreet.com is related to the specific opinions expressed by him on "Mad Money."

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Some of the stocks mentioned by Mr. Cramer on "Mad Money" are held in Mr. Cramer's Action Alerts PLUS Portfolio. When that is the case, appropriate disclosure is made on the program and in the "Mad Money" recap available on TheStreet.com. The Action Alerts PLUS Portfolio contains all of Mr. Cramer's personal investments in publicly-traded equity securities only, and does not include any mutual fund holdings or other institutionally managed assets, private equity investments, or his holdings in TheStreet.com, Inc. Since March 2005, the Action Alerts PLUS Portfolio has been held by a Trust, the realized profits from which have been pledged to charity. Mr. Cramer retains full investment discretion with respect to all securities contained in the Trust. Mr. Cramer is subject to certain trading restrictions, and must hold all securities in the Action Alerts PLUS Portfolio for at least one month, and is not permitted to buy or sell any security he has spoken about on television or on his radio program for five days following the broadcast.

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