Cramer: Amid Selloff, Here’s What to Buy & What to Avoid

(Click for video linked to a searchable transcript of this Mad Money segment)

Stocks have been in the sweet spot for a while, but Cramer is worried that's about to change.

"I have to tell you, when I look at next week's catalysts I've got a little trepidation about how things are going to shake out," Cramer said. "I fear we're entering Bizarro World where, for many, good news is bad news."

In other words, Cramer believes as economic data comes out, if it suggests the economy has continued to improve, it could trigger substantial selling. On the surface, that seems counterintuitive; a good economy is good for business. And it is, over the long-term.

But in the near term Cramer thinks big money investors will interpret positive economic data as sign that the Federal Reserve is about to pull back economic stimulus rather than risk runaway inflation.

"Therefore I believe that any piece of data that smacks of an accelerating economy will send all stocks tumbling," Cramer said.

Adam Jeffery | CNBC

However, that doesn't mean there isn't opportunity, you just need to be strategic. "I believe there will be stocks worth buying, they're just different from the ones you're used to buying," Cramer said.

What are the right ones?

"On a pullback, I'm a buyer of companies that could generate better earnings in the second half of the year. I'm talking about the banks, the techs and the industrials," Cramer said.

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Which are the wrong ones?

"I'm not a buyer of stocks that have higher yields because strong data sends interest rates up. In turn, higher rates nullify the advantage of higher yielding equities. So utilities, consumer packaged goods, master limited partnerships and real estate investment trusts, are all to be avoided." Cramer said.

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