Bears Stubbornly Claw at Lowe's

Follow the grass seed. When Central Garden & Pet (CENT - commentary - Cramer's Take) blew up, the market crushed Lowe's (LOW - commentary - Cramer's Take), betting that you could extrapolate the regional grass seed maker's business to the national do-it-yourself chain.

If that's the case, you should be buying Lowe's right now, because Scotts (SMG - commentary - Cramer's Take) reported a fine number without any of the pain that Central put up.

Of course, now the bears will say that Stanley Works (SWK - commentary - Cramer's Take) is the next reason to sell Lowe's. They will ignore Black & Decker's (BDK - commentary - Cramer's Take) good earnings in the same way that they are ignoring Scotts'.

I continue to believe that the best way to play Lowe's is the September 45 calls. If the stock spikes to $51, you can sell some common short against the call for disaster protection.

But I bet you won't need it. Because the pain in retail is now well-documented and I think that it's now pleasure's turn.

Random musings: As I confided to Action Alerts PLUS subscribers, I am beside myself with this Nortel (NT - commentary - Cramer's Take) position. For the record, when the problems occurred it was clear to me that 1. earnings were vastly overstated, 2. margins were vastly overstated and 3. future margins would be crimped. I bought with the idea that everyone would realize this. But the way the company dribbles stuff out makes it so each week you get crushed. What else can go wrong? I can't think of anything, but they have confounded me with ways to mess up before. I guess they can do it again. I hold on because I genuinely believe in the industry, but that's been a real bad bet. ... In the good bet department, I put Kellogg (K - commentary - Cramer's Take), which isn't as sleepy or as bad as people think.

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At the time of publication, Cramer was long Nortel.

James J. Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column to [e-mail]. Listen to Cramer's RealMoney Radio show on your computer; just click here. Click here to buy Cramer's latest book, "You Got Screwed!" Click here to order Cramer's autobiography, "Confessions of a Street Addict."