Investing Most Loathsome

The chump effect. That's what I used to call it when you could buy a stock and be down two bucks on it by the time you got the report -- because you feel like a chump.

Anyone who bought an oil stock today -- National Oilwell Varco (NOV - commentary - Cramer's Take), Transocean (RIG - commentary - Cramer's Take), EOG (EOG - commentary - Cramer's Take) or even little Cabot Oil & Gas (COG - commentary - Cramer's Take) -- knows what I am talking about. These kinds of quick, relentless declines make you simply unwilling to risk any capital.

I have been saying that we are allowing ourselves to be crushed by ETFs with firepower that is well beyond what this market can handle. It's like the bulls have muskets and the bears have Spandau machine guns. So you get these gaps down that make buying stocks just too unpalatable and too inhospitable for all but the most seasoned and grizzled of players.

When I see these kinds of declines, I am tempted to say that this sector is now broken. These stocks, which have been right on the money as predictors (with the exception of the oft-manipulated up Exxon (XOM - commentary - Cramer's Take)) are now forecasting $25 oil, or gasoline starting to get near $1.50 -- for premium!

I wonder what happened to all of that slow money that piled into commodities to have "exposure" to them. Remember when we heard that pension funds were going not only into Chevron (CVX - commentary - Cramer's Take) and Exxon but the futures and physical commodities? Any municipality or pension fund that got talked into that kind of exposure is now bleeding from the eyeballs and I am sure there's a ton of stories to be written about it that will serve only to drive oil lower.

What's the right price for oil? Let's use retail sales as a barometer. According to the DeeBee Report, a proprietary newsletter, retail sales -- excluding WalMart (WMT - commentary - Cramer's Take) -- were down almost 10% year over year. Now there is a difficult calendar shift that makes those numbers look worse than they are, but let's say that's a rough approximation of how much spending and gallivanting there's been.

You could extrapolate that number to the buying of gasoline and obviously we would be much higher -- unless the whole move was a gigantic mirage and we are simply back to the old days when there's oil galore and we don't need to worry about it.

Either way, the real takeaway is that when you see declines that are disproportionate with the commodity and are breathtaking and swift, you are repelled from the real commodity -- stocks. That is what the ETF's have done, and it makes you want to stop investing.

That, judging by the endless rally in Treasuries, is just what is happening.

Random musings: It did bother me today that no one on any network I watched today thought we had much further to fall. I would have like to have heard more bears on air. Too many bulls for comfort until we retest.

At the time of publication, Cramer was long CVX and WMT.

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Jim Cramer is co-founder and chairman 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. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

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