Cramer's game plan: Bargains may not be enough to attract buyers

KEY POINTS

• CNBC's Jim Cramer laments the state of the stock market as he looks ahead to a pivotal week.
• The Federal Reserve is expected to raise interest rates next Wednesday.
• The "Mad Money" host will also watch for developments in Johnson & Johnson's stock and several key earnings reports.

The stock market's staggering declines may not be over, but steel-stomached investors might still find some worthwhile stocks to buy if they're careful and know where to look, CNBC's Jim Cramer said Friday.

"[This] is a treacherous market. It is a mean market. It is an angry market. It reacts horribly to even the slightest bit of troublesome news. It doesn't even like good news. We now sit at the lowest level since April and I don't think we're done with the decline," the "Mad Money" host warned after the Dow Jones Industrial Average plunged nearly 500 points.

However, "there are bargains being created. You've just got to know where to look for them. The problem is there are just not enough to do the job" of reversing the market's bearish moves, Cramer said.

Now, Wall Street is approaching a "peculiar junction" ahead of the Federal Reserve's meeting next week, at which the central bank's leadership is widely expected to raise interest rates by a quarter-point, Cramer said.

Reiterating his concern about a lot of economic indicators sending conflicting signals, Cramer suggested that Fed Chair Jerome Powell taking a data-dependent, wait-and-see approach instead of hiking rates again.

"The smartest thing Jerome Powell could do here would be to wait another month or two to see which of these indicators are telling the truth, ... especially when we know that there will be tens of thousands of layoffs in retail alone a month from now," he said. "Unfortunately, Powell wedded himself to a rate hike this month and now he can't back down, not without making the Fed look toothless."

With that in mind, Cramer turned to his game plan for the week ahead:

Monday: Johnson & Johnson in focus, Oracle, Red Hat

Johnson & Johnson: The pharmaceutical giant saw its worst trading day in 15 years on Friday after Reuters reported that Johnson & Johnson knew for decades that its baby powder product contained asbestos. The company lost almost $40 billion in market value in a single trading session.

Cramer will be watching the stock's action on Monday, keeping in mind that some experts he spoke to said this was more of a $7.5 billion problem than a $40 billion one.

"Stocks that come down this hard in one session almost never turn on a dime. If J&J rallies on Monday, the bold folks who bought it today when it was down $15 will probably flip out of it and knock it right back down, so please be careful. If you wait until the end of the day on Monday, given those parameters I just outlined, I think you'll be rewarded," he said. "I would leave room to buy a little more Tuesday if you decide that J&J's right for you, because the panickers never seem to be done panicking."

Oracle: Software colossus Oracle will report earnings after Monday's closing bell. Lately, its results haven't exactly been in line with the story the company tells about its prowess in the cloud, Cramer noted.

"However, you've got some real low expectations here," he said. "I'm not saying Oracle's a buy, no way, but ... if you already own it, it's probably not worth selling into the quarter."

Red Hat: Open-source software play Red Hat, which recently struck a deal to be acquired by IBM, will also report.

As such, talking about the stock "might be a moot point," Cramer admitted, "but if the company delivers a better-than-expected quarter, it could positively impact one of the worst-acting stocks in the Dow, which is IBM itself."

Tuesday: Darden Restaurants, FedEx, Micron Technology

Darden: Cramer hoped the Olive Garden parent would "keep up its string of terrific numbers."

"If they can contain the verbiage about higher labor costs, which everybody has, and just talk about growth, [the stock] has a chance to rally," he said.

FedEx: Recent management changes at FedEx have put the stock in a less-than-ideal position ahead of the shipping company's earnings report, the "Mad Money" host warned.

"All I can say is that the huge declines ... have not insulated [FedEx] from further declines," he said. "If FedEx hadn't just announced the retirement of a key executive, I'd say it's probably worth trying to pick some up for the long term ahead of the quarter. Now, though, I'd just as soon find out why he's retiring."

Micron: Chipmaker Micron will also report earnings. Cramer outlined a specific strategy for investors who want a piece of the semiconductor space.

"Maybe there's some pin action" after the company's quarterly report, he said. If there is, "you want to buy Broadcom, you want to buy Intel ... or AMD, if you can get it under $19. I think those are much better buys," he advised.

Wednesday: Fed meeting

The Federal Open Market Committee will meet Wednesday for what many expect to be an interest rate hike, and to Cramer, "it feels like we're in uncharted waters."

"If [Fed Chair] Jay Powell starts talking about all that dot plot nonsense and overshooting and strong fundamentals away from wages, ... [it will create] a nightmare before Christmas," the "Mad Money" host said. "Jay, all you've got to do is you've got to say ... you were too exuberant when you proclaimed the need for many more rate hikes. Own it. That's what the champs do."

"If you say 'one and wait,' the market could actually be off to the races," he added.

Thursday: Nike

Athletic apparel and shoe maker Nike reports Thursday evening, but even though Cramer expected it to be the "best" earnings story of the week, he worried that ties to China could continue to weigh on its stock.

"I keep thinking this is a great time to be able to own the sneaker kingpin because it's in one of those dominant cycles. Once again, though, the company's got to walk a fine line," he said.

"If there's any Chinese weakness at all, any fear of weakness at all," the $71 stock will fall to the $60s, Cramer warned.

Friday: CarMax

CarMax, the country's biggest used-car retailer, reports its latest quarterly results on Friday.

"This used-car retailer is part of the economy that I am worried about. It's called the real economy and it isn't doing well," Cramer said. "I doubt the numbers will inspire any confidence."

WATCH: Cramer's game plan with the Fed in focus

Disclosure: Cramer's charitable trust owns shares of Johnson & Johnson.

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