Sell the Nazz Rally

If the Nasdaq rallies today, please ignore it. If you recall our now totally ridiculous run up in the Nasdaq two weeks ago, a run spurred by numerous upgrades of semiconductor and semiconductor equipment companies by analysts who are always bullish no matter what the fundamentals are, you know that it was dead wrong.

Dead wrong. I said it at the time, but in this market the bulls don't give a darn because all of their work is based on "cheapness" and that you buy stocks at this stage of a recession because you know we are almost out of it.

These are lies.

Today Intel's (INTC - commentary - Cramer's Take) really cheap. Using a Warren Buffett analogy -- although he doesn't like tech, just GE (GE - commentary - Cramer's Take) and Goldman (GS - commentary - Cramer's Take), two "much easier to figure out companies" -- Intel's now genuinely cheap. But then again, I forgot that Buffett's always right -- see Doug Kass' column -- and those who say he is wrong are simply short-time trader types.

Cheapness when it comes to tech has never mattered. Intel does have a good dividend and a case can be made for a patient investor to get his butt kicked while waiting for a turn, but the simple fact is we have had a turn, a turn for the much worse and the idea somehow that it wouldn't affect Intel or the semiconductor equipment stocks -- the real darlings, amazingly, of the analysts -- is just historically inaccurate.

Given that we know that the downturn is severe -- and we know that because consider when Intel made this call: in the middle of the quarter before it even had its end-of-November look where it has traditionally issued statements about how business is better than expected because this is traditionally a boom quarter -- I can only expect that the Nazz will trade down.

And here is the irony and the rub: That's never how it works. When Intel preannounces to the downside, that's usually a sign to the analyst -- hopefully not to you -- that the worst is finally over and you have to buy tech.

If you agree with this completely fatuous reason, why not wait, as the others are going to take action today in what will seem like a prop-up but is actually the rabid nature of conditioned mutual fund managers to buy on bad news, because alas, things can't get worse.

My take: Sell the bogus rally, if we get one, in the Nazz. We know from 2002-2003 that the declines in even the good Nazz stocks were breathtaking ... and things were much better then.

Random musings: China's no longer rolling over with alacrity. Worth watching as Europe frets and deals with nascent inflation that I know I couldn't even find with a high-powered microscope.

At the time of publication, Cramer was long GE and Goldman Sachs.

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Know what you own: Cramer mentions Intel. Other companies in the semiconductor industry include AMD (AMD - commentary - Cramer's Take), Texas Instruments (TXN - commentary - Cramer's Take), Sun Micro (JAVA - commentary - Cramer's Take), STMicroelectronics (STM - commentary - Cramer's Take) and Marvell (MRVL - commentary - Cramer's Take).

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