Drillers Look Like Shorts

So it was a head fake. The usual head fake. We simply don't have a strong enough economy to maintain those higher oil prices, and we don't have enough oomph in the economy to own tech.

But we don't have any buyers of the consumer stocks either. In short, it is, as Bob Marcin says elsewhere, a really bad day. I think that the Oil Service HOLDRs (OIH - commentary - Cramer's Take) is the thing to watch here. We have seen a huge move in the likes of Transocean (RIG - commentary - Cramer's Take) and National-Oilwell Varco (NOV - commentary - Cramer's Take). They have been ramping.

However, the reason why they have been ramping is that supply has been cut back. That doesn't lend itself to more drilling; it lends its self to less lending.

I think these big drilling plays are all shorts. Remember the work that Eric Oberg did for us: The ETFs that are sector-related can be leaned on to break certain stocks. The worst, with the exception of the banks, is the oil/oil-service complex, which can be totally and completely motivated by ETFs.

The two worst? National-Oilwell Varco and Transocean. May I suggest January 60 RIG puts and January 35 NOV puts?

Those could be big winners. Gunslingers should double up by buying National-Oilwell Varco January 25 puts for 40 cents and Transocean January 50 puts for a dollar.

Random musings: Now I am saying to sell the house's money on the Monsanto (MON - commentary - Cramer's Take) calls. That's enough for me. Pays for about three years worth of subs for a whole desk! ... Jim Walter Homes closing, huge homebuider, according to the Home Builder Implode-a-Meter. Wow, more capacity taken out.

At the time of publication, Cramer had no positions in stocks mentioned.

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Know What You Own: Other oil-service stocks include Noble (NE - commentary - Cramer's Take), Pride (PDE - commentary - Cramer's Take), McDermott (MDR - commentary - Cramer's Take) and Weatherford (WFT - commentary - Cramer's Take).

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