Gasoline Plunge Puts Funds in a Big Squeeze

OK, I will say it, this is the greatest short squeeze I have ever seen, and it is based on the coming dramatic drop in gasoline. There's just no place for it, no place to put it. And it is entirely unexpected. No hedge fund was prepared for this.

The stocks that are rallying here are the stocks that have been the most heavily shorted in every segment: banks, savings-and-loans, brokerages, and then all the gasoline users: retailers like Kohl's (KSS - commentary - Cramer's Take) and Macy's (M - commentary - Cramer's Take), airlines -- any airlines -- appliances, stocks like Whirlpool (WHR - commentary - Cramer's Take), all brokerages, and autos, casinos -- anything that does well with gasoline lower. Throw in HMOs, so shorted, which rallied on an inline number for UnitedHealth Group (UNH - commentary - Cramer's Take)! Incredible.

The stuff that is down, which has no bottom: ag, oil, gas, oil service, coal, minerals, steels.

We are seeing the unwinding of everything that has been going on for the last year. It is vicious, and it overwhelms the fundamentals like Washington Mutual (WM - commentary - Cramer's Take) -- a really bad quarter -- or Costco (COST - commentary - Cramer's Take).

These are gigantic moves, and they relate to a hedge-fund community that has completely and utterly been on the wrong side of the trade.

I have never seen anything like it. So much money, so wrong, so poorly positioned, producing an exact inversion of the gains that were made for the last year.

Just repealed.

Random musings: This tech world is totally upside down, too. Research In Motion (RIMM - commentary - Cramer's Take) is now viewed as worst-is-over situation, aided by AT&T's (ATT - commentary - Cramer's Take) good numbers. But ADC Telecommunications (ADCT - commentary - Cramer's Take), which had been doing well, is a disaster.

At the time of publication, Cramer had no positions in stocks mentioned.

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