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Cramer's Tough-Market Playbook

Cramer’s message Monday: This market could go much lower before we see a bottom.

The potential for intermittent oversold rallies is there – maybe even soon – but the trend is downward, the Mad Money host said.

So the focus right now is on capital preservation rather than appreciation. The search for big gains could actually lead to big losses, Cramer pointed out, so play it cautious. That way you’re ready to pounce when the market turns up.

Cramer laid out his four conditions for buying during today’s show. Homegamers, take heed:

When the market’s sold-off so hard that we get what Cramer calls an “oversold rally,” you can buy. When the negativity reaches such a feverish pitch that it sparks a “crescendo sell-off,” creating a bottom, you can buy. Both these circumstances are brief, though, so take your profits quickly, he said.

A stock with strong, consistent earnings and a catalyst – think upcoming analyst meeting or numbers bump – can also be bought, though Cramer admitted that these picks are few and far between. One in particular Cramer said he likes is Genentech . Read about it here.

Sure, this kind of talk can sound dark and foreboding. But this market won’t stay down forever. So keep in mind Cramer’s words of encouragement: “We’ve been here before, and we’re still standing.”

Questions for Cramer? madmoney@cnbc.com

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  • Jim Cramer is host of CNBC's "Mad Money" and co-anchor of the 9 a.m. ET hour of CNBC's "Squawk on the Street."

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