We Need the Selloff

Here comes the troika! We have unemployment starting not just to creep up but to ramp up. It looks like the Europeans are going to take their time with the rate cuts. And we have the financial situation still dicey and easily brought down by short-sellers who are waiting to gang up once again on Wells Fargo (WFC - commentary - Cramer's Take), Citigroup (C - commentary - Cramer's Take), Bank of America (BAC - commentary - Cramer's Take) and of course Goldman (GS - commentary - Cramer's Take) and Morgan Stanley (MS - commentary - Cramer's Take). I think the opposition of the American Insurance Association to helping some insurers could cause other insurers to not get TARP funds, which makes these stocks easy to get crushed.

Retailers can still be crushed because the valuations are still not cheap. (By the way, Bob Marcin had a great squib yesterday on how the market is not cheap.)

Finally, oil inventories could easily send that group down after yesterday's markup. The Schlumberger (SLB - commentary - Cramer's Take) news is truly unexpected, although the stock had just been crushed. That can take the whole Oil Service HOLDRs (OIH - commentary - Cramer's Take) down huge today, as the ETFs can hammer them. As usual, key off Exxon (XOM - commentary - Cramer's Take) and Chevron (CVX - commentary - Cramer's Take).

You know what, though? I think it's good to have the selloff now. We need to have the market pricing in the employment shortfall and the failure of the BOE and the ECB to slash rates big. (Could they be waiting for oil to go to $40 before they move?)

We need this selloff today it in order to avoid a huge decline later in the week, especially because we are almost overbought.

Don't like the tape; no one else does. Let's wait to see how low we go.

At the time of publication, Cramer was long Chevron, Goldman Sachs and Morgan Stanley.

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