After the Drop, Here's What to Expect

Felt bad. But real bad if you have been in the big winners, the JPMorgans (JPM - commentary - Trade Now) and the Chevrons (CVX - commentary - Trade Now), or if you bought the peaks of the techs today.

How serious?

The bears have something going for them that could play their way: Monday is an important Jewish holiday, Yom Kippur, and whether it is observed or not, there will be a three-day-weekend-like feel to Friday.

That could mean to people, "Take something off the table ahead of the three-day weekend and beat the people who will do it on Friday."

Strange reasoning? I remember being at my hedge fund and being worried so much about the day that I lightened up ahead of it, because I was afraid that I would have to pay attention to the market. When you are up a lot and you don't want to pay attention, you sell.

So there will be pressure after this kind of run. Plus, one look at the bad action in Prudential (PRU - commentary - Trade Now) after the buy-to-hold insurance call from Morgan Stanley could inspire shorts to go back out there and place new bets against stocks, as that gain from PRU puts is pretty tasty. Looks like a change in the risk/reward to me.

I am not trying to be too dire. I am simply saying that we should, by all means, have a selloff here, and that we don't have a lot of short-sellers out there to cushion the blow.

A 3%-to-5% decline after the storied and failed run to Dow 10,000? I think that's perfectly reasonable, although, despite the overbought nature of the market, it was not well prepped for, as the shorts have been run out of town on a rail, and the longs, for the first time, didn't support the market into the bell.

At the time of publication, Cramer was long JPM.

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