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NEW YORK (TheStreet) -- We need to see the speculative stocks and the biotechs get washed out before we sound the "all clear," Jim Cramer told his Mad Money viewers Friday. Cramer said that caution, not aggression, will be the theme of next week's game plan.
On Monday, Cramer said, his mandate is that if you're trading on margin, you sell. Never invest with borrowed money because times like these are when margin traders tend to get crushed, he cautioned.
For Tuesday, Cramer said he'll be watching Alcoa (AA), a stock that's up 60% from its lows last year. He said to expect some profit taking in Alcoa even if it reports a great quarter.
Next, on Wednesday, it's Constellation Brands (STZ) and Bed Bath & Beyond (BBBY) in the spotlight. Cramer said Constellation is benefiting from the forced spinoffs of Anheuser-Busch InBev (BUD) but Bed Bath remains in "no man's land."
Then, on Thursday, Pier 1 Imports (PIR) and Rite Aid (RAD) will be reporting. Cramer said he expects good things from Pier 1 but the stock is too high to recommend. Rite Aid is a possible buy if the market weakness continues into next week.
Finally, on Friday, it's Wells Fargo (WFC) and JPMorgan Chase (JPM), a stock Cramer owns for his charitable trust, Action Alerts PLUS. Cramer said he was hoping to see a gentle rise in interest rates to help these big banks along, so for now just listen to what these banks have to say.
Is this what a top in the market looks like? That's what Cramer was thinking while looking at the life-size food characters dancing around the New York Stock Exchange Friday morning as the hoopla surrounding the GrubHub (GRUB) initial public offering kicked into full gear.
Cramer said he's been worried the markets simply cannot handle the large supply of new IPOs flooding in day after day. It reminded him of the dot-com collapse of 2001 when investors simply got greedy and paid the price.
But unlike 2001, Cramer said, companies like GrubHub are profitable and have actual earnings growth. At today's prices, the stock trades at 16 times earnings with a 30% growth rate, he noted, which makes it expensive but not outrageous.
But for every IPO gone well, there are countless others that are not profitable and, like 2001, are trading on a multiple of sales or other sketchy metrics.