Since the Federal Reserve lowered the boom on interest rates last week, there's been a greater need for investors to use caution, Jim Cramer warned his Mad Money viewers Wednesday. After another big down day on Wall Street, Cramer said the panic is real which makes it the perfect time to formulate your game plan.

Sellers outweighed the buyers 10-to-1, a sign that normally signals the bottom is at hand. But Cramer said he's concerned the selling is not over and we'll see even more weakness ahead.

The impact of Fed Chairman Jay Powell's comments last week cannot be overstated, Cramer reiterated. The Fed should be a measured, data-driven institution, not one that adheres to a single philosophy at all costs. It was that kind of hubris that helped usher in the financial crisis of 2008, Cramer said, and while today's economy is nothing like 2008, the Fed can certainly usher in a slowdown or recession.

Powell is simply wrong in his assessment that the economy is red hot and must be stopped at all costs, Cramer said. Weakness is popping up everywhere. You only need to listen to find it.

Homebuilders are seeing sluggishness now that mortgage rates have topped 5%. Chemical and plastics companies like PPG Industries have hit a wall. Bank lending has slowed. And there's a glut of semiconductors, so much so that Cramer said he no longer trusts Advanced Micro Devices (AMD) or Nvidia (NVDA). Add to that a trade war and a strong dollar and there's plenty to signal the Fed to slow down.

What will turn the markets around? Cramer said Powell needs to walk back his comments and assure investors he's looking at the data. Second, oil prices need to come down to help the industrials and transports. Third, we need to see some relief in transportation, where regulations have created a driver shortage. Finally, we need a ceasefire in the trade wars.

All of these things will take time, Cramer admitted, which is why he sees more weakness ahead. Cramer and his team are reviewing their portfolio and analyzing opportunities.

A Correction Is a Terrible Thing to Waste

A vicious correction is a terrible thing to waste, Cramer told viewers. That's why, despite the continued weakness that's likely in the next day or so, Cramer would start doing a little buying.

Of course, all of the usual Mad Money rules apply: Only buy high-quality companies. Buy in small increments on the way down. And make sure you understand that your first buy will not be your last.

If you're patient and you're selective, selloffs are the opportune time to buy, Cramer concluded, especially with full employment and an economy that's still got some life left in it. 

Over on Real Money (https://realmoney.thestreet.com), Cramer says only buy these names if you like the fundamentals

Follow the Activist investors

When the markets enter a tailspin, investors often look for stocks with activist investors behind them. After all, if a very smart, very rich money manager gets behind a company, shouldn't you?

for example; Activist Bill Ackman got involved with Starbucks (SBUX), but Cramer said Ackman has little to offer the company. Cramer still likes Starbucks, but based on its own merits, not on only Ackman's involvement.

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