Exxon's (XOM - commentary - Cramer's Take) strength in the face of the multiple downgrades is a sign that we have THE leadership sector in this oil group ... not that leadership seems to matter right now, given the retest of the Nov. 20-21 lows. But if there is going to be a rally, it is going to start with this stock's climb to $75.
It is worth pointing out, though, that once again the shorts tried to press the crude futures, the $35 level, down to $30, and they could not do it. I think that's really bullish for oil, especially when you consider how I believe that natural gas could be slicing through $4. Throw in that the front-month contract, which comes off tomorrow, is lower than the out-months, and that makes me even more bullish.
When you consider the immense option pressure on Exxon to close at a strike, you might very well be looking at $75, which could be the only hope to offset this incredible decline that's taking out the key technical levels that matter. (For levels, check Bob Byrne in the CC.) I know that Citi (C - commentary - Cramer's Take) and Bank of America (BAC - commentary - Cramer's Take) would seem to nullify any rally in the Dow, but because of the way the index works, those two won't matter much. I also think that Hewlett-Packard (HPQ - commentary - Cramer's Take) and American Express (AXP - commentary - Cramer's Take) are real deadweights that could counter Exxon, causing me to worry about a false XOM tell. Remember, the market cap is huge here, so be aware that there is a potential for XOM to stabilize the averages. (If only the keepers of the Dow would hit that eject button and replace these GM (GM - commentary - Cramer's Take), Citi and Bank of America with Goldman Sachs (GS - commentary - Cramer's Take), Visa (V - commentary - Cramer's Take) and Google (GOOG - commentary - Cramer's Take)!) If the market can reverse, it will be reversed because of Exxon. Yes, this stock is that powerful.
Jim Cramer Blog Embrace the Technical Binary Nature 2/19/2009 7:52 AM EST The levels matter so much, so look for names that you like now but would love lower.
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