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Cramer cautious, 'something unexpected may be imminent'

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

Cramer has expressed concerns about the market for a while. He's advocated watching developments as well as price action very closely. But now, he says, if you haven't already, it's time to act.

"If you have big profits, ring the register," Cramer said. "If you're already in cash, sit tight."

Largely the "Mad Money" host is very worried about sudden developments out of Iraq, with militants seizing control of major cities, some of which are in important oil producing regions.

Jim Cramer on Mad Money.
Adam Jeffery | CNBC
Jim Cramer on Mad Money.

President Obama said on Thursday that he was watching the rapid developments with "a lot of concern," and that the United States stood ready to provide increased help to the Iraqi government, though he did not specify what kind.

"So what will it be? Airstrikes? Drones? Soldiers? Boots back on the ground in Iraq? That's uncertainty writ large. And if the market hates anything it's uncertainty," said Jim Cramer.

These developments change the game.

"Wall Street knows all too well that not one, but two bear markets were brought on by Iraq," Cramer added. "Saddam's invasion of Kuwait in 1990 and our 2003 invasion of Iraq itself caused tremendous weakness in markets."

And because the stock market is a predictive mechanism, Cramer says, the declines began long before any meaningful action was taken by our government.

Therefore, Cramer feels that it's only prudent to at least consider the possibility that markets may be in for some rough sledding.

"Now, no one's talking about another full blown war over Iraq," Cramer said. "That's not what this is about." Rather it's the unknown of what lies ahead that Cramer believes Wall Street will find too difficult to navigate. And when that happens, the Street tends to sell first and ask questions later.

Even if the geo-political storm blows over, in the near-term, Cramer is looking for oil prices to spike. "I think, conservatively, the price of oil could easily increase by ten percent."

And, as Cramer so often says, higher oil prices act like a tax. "In fact, if oil rises much beyond where it already has I think you'll see a wave of number cutting and it will be in the market's leadership areas, which will shake the confidence of all investors."

And that's just only one of the possible negative consequences. Considering a slew of others could emerge, Cramer says it's only sensible to "sit this one out on the sidelines."

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And it should be noted that although Cramer has often said that pullbacks present buying opportunities there are just too many variables for Cramer to advocate buying weakness right now.

"It's time to wait and watch. See how things play out. I've been through two Iraq shocks already. Both times it was a mistake to put money to work until there was more clarity."



Call Cramer: 1-800-743-CNBC

Questions for Cramer? madmoney@cnbc.com

Questions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com

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