Nat Gas Stocks Are Headed Lower

I am of three minds with XTO (XTO - commentary - Cramer's Take), which priced a gigantic stock offering last night at $48 -- well in the hole and well below where it filed the stock to sell. One, that's sure cheaper than the $70 it was a couple of weeks ago. Two, I can't believe the stock fell this fast, given how management is fabulous and has always done the right thing. And three, I can't believe the offering wasn't pulled given the price decline, and again, that the management is fabulous -- because they must really think natural gas is going even lower.

I have been saying natural gas is the fuel for the year, and it sure had been until July. Now everything except the usefulness and cleanliness and security of it is being called into question.

I have no doubt that this is the gap fuel between solar and wind and conservation and renewables. It has it all over coal and oil. It is also domestically abundant.

But it is in a sour patch right now of killer proportions.

I think that these stocks are reflecting $7 gas.

I think that the fact that XTO did this deal tells you that $7 is coming, a total repeal of the move. Total.

My only question -- are the stocks ahead of the move, and will they bounce ahead of when nat gas gets there, or are they simply in synch?

We bought down on these for Action Alerts PLUS because I believe in the longer-term nature of this fuel. But in the shorter term, XTO's amazing management is basically saying, "We are going lower, so we are pricing now."

I like the stock, I like the price. Somehow, I believe I will get to love it lower, though. And if it opens up big as the Chesapeake (CHK - commentary - Cramer's Take) deal did, I would sell every share I took down.

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

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