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Cramer's game plan: Stay on your toes as market-moving news flow continues

Key Points
  • CNBC's Jim Cramer tells investors not to be too positive or too negative in a week with major earnings reports, a potential trade deal with China and the midterm elections.
  • The "Mad Money" host will be watching Disney earnings, a key piece of economic data and more.
Stay on your toes as market-moving news flow continues

CNBC's Jim Cramer wants investors to be prepared for the week ahead after days of news-driven swings in the stock market.

"This market punishes you for having too much conviction," the  "Mad Money" host said on Friday. "When we get too negative, we're blindsided by positive developments. When we get too optimistic, we get hit with days like today. I bet next week gives us more of the same."

Cramer pointed to some recent intraday swings: on Friday, stocks opened higher after a report saying President Donald Trump had requested his cabinet members to prepare for a trade deal with China.

Shortly thereafter, Trump's chief economic advisor, Larry Kudlow, refuted that story on CNBC, sending the market lower. Then, Trump reiterated his optimism and stocks started climbing again, at least until a positive employment report seemingly renewed the need for the Federal Reserve to combat inflation with more interest rate hikes.

"It was all very confusing," Cramer said. "I'm just surprised we didn't go down even more, especially since Apple's stock got eviscerated ... even though the company reported an upside surprise. "

But even though shares of Apple continued their slide on Friday, the "Mad Money" host stood by the stock, saying that Apple will be "buying back boatloads of its stock next week" and advising investors to "join in."

With that in mind, here's his game plan for the week ahead:

Monday: Marriott International

Hotel colossus Marriott International will report earnings after Monday's closing bell, and Cramer sees "something strange afoot here."

"You can normally bank on this hotel company to beat numbers, but it failed to do so last time around and the stock's down 11 percent for the year," he said. "That's a lot for this very solid chain."

But after speaking with CEO Arne Sorenson in late September, Cramer felt better about Marriott's prospects.

"While he obviously didn't tell me anything about how the quarter's going, it was a good reminder that he's doing a fabulous job," Cramer said. "That includes using some of the latest technology from Salesforce and others to help his customers get everything they want before they ask for it. "

Tuesday: Midterm elections, CVS, Etsy, Wendy's

2018 midterm elections: Tuesday is Election Day, and while Cramer doesn't like to do "armchair political analysis," he predicted that if the Republican party holds both houses of Congress, the defense stocks will mount a "huge rally."

"If you're banking on a GOP victory, ... you should buy Northrop Grumman or Raytheon or both. They had spectacular quarters — we just got the numbers — yet their stocks got punished anyway, " he said. "How about if the Democrats prevail? Honestly, the market likes gridlock, so that could be a reason to rally all by itself. On the other hand, the market's less enthusiastic about House Oversight Committee investigations into the White House. Let's call it a wash."

CVS Health: Pharmacy operator CVS, on track to merge with health insurer Aetna, will report earnings Tuesday morning.

"I'd be a buyer both before and after the quarter," Cramer said.

Etsy: Cramer issued a "word to the wise" regarding the e-commerce company's upcoming earnings report.

"Even after the big meltdown, ... Etsy's [stock has] more than doubled this year," he said. "Lately, winners tend to get punished even if their earnings are good, so maybe ... wait until after they report" to buy.

Wendy's: After McDonald's successful quarter, Cramer felt good about Wendy's prospects and said he'd buy the stock if it fell ahead of its Tuesday earnings report.

Wednesday: Humana, Qualcomm, Take-Two Interactive

Humana: Calling Humana "one of the best-run health insurance companies on earth," Cramer expected a great quarter from the Louisville, Kentucky-based company.

Qualcomm: Cramer suggested listening in to Qualcomm's post-earnings conference call on Wednesday to hear how the company's share buyback, patent disputes with Apple and China business are progressing.

Take-Two Interactive: Take-Two's will finally share the sales results from its latest "mega-blockbuster" game, Red Dead Redemption 2, Cramer said.

"CEO Strauss Zelnick almost never goes out on a limb, but he repeatedly told us right here on 'Mad Money' that this one would be a big winner," Cramer said. "So far, the game's off to a spectacular start. We're going to learn more about its staying power."

Thursday: The Walt Disney Company

With its newly won Twenty-First Century Fox assets in tow, Disney will share its earnings results with Wall Street on Thursday.

"I'm very excited about this call and I would absolutely be a buyer of the stock so long as it doesn't run too much going into the quarter," Cramer said. "No longer will Disney's narrative be controlled by the stories and the vicissitudes of ESPN. That's a huge achievement in and of itself."

Friday: Producer Price Index

To the "Mad Money" host, the producer price index, which measures the change in average selling prices over time, "is the only number left that could potentially give us some hope that the Fed won't need to keep raising interest rates after December."

"I think that commodity inflation might actually be peaking in this country, thanks in part to a precipitous decline in the price of oil ... and lots of metals and wood," Cramer said. "However, if the number's too hot on Friday, that will justify more rate hikes and the market will indeed get slammed."

Final thoughts

Taking into consideration the market's recent volatility, Cramer's lasting message to investors was to stay on their toes amid the market's seemingly daily swings.

His key lesson? "What the news flow giveth, the news flow can taketh away."

WATCH: Cramer's game plan for election week, Disney earnings

Cramer's game plan: Stay on your toes as market-moving news flow continues

Disclosure: Cramer's charitable trust owns shares of Apple, Raytheon and Disney.

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