The "Armageddon" Gameplan

Cramer is just as frustrated as you are with this topsy-turvy market in which "stocks just fall and then keep falling." How long can the market keep dropping? Even with today's 494-point rally -- for which Cramer is thankful -- the week still ended down 5.3%. What gives? Cramer's explanation for this phenomenon: people need cash, and they need it now.

What's that got to do with the current global market rout, this near-"financial Armageddon?" Well, with the exception of U.S. Treasurys, all asset classes are falling apart -- "exactly like the Great Depression."

Stocks especially are "unlucky" because, of all the various instruments we can put our money into -- commodities, real estate, bonds, hedge funds -- stocks are the one asset class that can be sold fastest and with the least penalties, and turned into ready cash. It's "where you can go out and actually raise money, where you can sell."

"Stocks are being sold because they can be sold." That, according to Cramer, is what's perpetuating this often illogical-seeming selloff across all sectors. He stresses, "Stocks are not being sold because they represent no value." It has nothing to do with fundamentals. People simply need cold, hard cash.

So what should be your gameplan, given this tough bear environment? Cramer says if you trade at all, you should only do it in "small increments on the way down" and sell on the lifts so you can pay for any big expenses in the next few years, like "buying a home or paying for college."

The only reason to buy at all, adds Cramer, is precisely because stocks have been driven so low. Many sound and well-run companies are seeing their stock at artificially low levels: "Filene's Basement levels, even Family Dollar levels." You know Cramer's rules on what to buy: "recession-resistant stocks, stocks trading at or through their cash, and the accidental high-yielders, and you have to know the companies behind the stocks will still be alive and kicking when the dust settles."

Bottom line: "Stocks get more attractive as they go lower, but the selling is intense and motivated by the fact that pretty much all the giant portfolio managers have to sell something, and stocks just happen to be a commodity that they can sell immediately. So you have to buy in small increments using wide scales as we go lower, because of the endless -- and now ridiculous -- sales."

Questions for Cramer?

Questions, comments, suggestions for the Mad Money website?