This Commodity Selloff Is Just Profit-Taking

It's tough to go against Helene Meisler's chart comparing commodities with the Nasdaq in 2000. They do look like similar rollovers.

My problem is this: The action in the Nazz was a combination of retail investors charging into the markets along with the brokers' abilities to create new securities to meet those demands.

The commodities are somewhat different. In most cases, there is worldwide demand that is quite strong for oil and for ag and for minerals, including gold. The demand is not U.S.-driven.

What we have seen in the stock market today is the kind of crazy gyration that comes with the no-uptick rule and the incredible raiding of ETFs, often coordinated, that make it so you can't get in front of the train.

Now, I have no doubt that there are real sellers of Mosaic (MOS - commentary - Cramer's Take), including some who would sell down 10. I get that Deere (DE - commentary - Cramer's Take) could be clobbered on a short-term basis. I have not been big on Monsanto (MON - commentary - Cramer's Take) ever since Du Pont (DD - commentary - Cramer's Take) took aim directly at them.

But my point is that ag is not Webvan.

Oils? Oil is not being discovered, period. There is tremendous demand for oil. Period. Oil is not eToys. And may I add that eToys never paid a 5% yield, as BP (BP - commentary - Cramer's Take) does, and never bought back stock the way Exxon (XOM - commentary - Cramer's Take) does every day. Exxon seems to be hostage to expiration, by the way. Legitimate that this one's going to go out at $85.

Gold? We are hearing that gold has come down because the dollar's about to get strong. I will believe it when I see it: Gold is also in short supply, loved by China and India and I don't trust the dollar to go up yet. The dollar's a function of our profligate government, which doesn't care one whit about spending and will never raise taxes.

All of these stocks are subject to the vagaries of hedge funds that rush in and out of commodities to financials to early-cycle stocks. They are so afraid of missing a move that they just come in en masse at a moment's notice.

I think that options expiration week is also playing havoc with all of these stocks: the Oil Service HOLDRs (OIH - commentary - Cramer's Take) craziness is typical.

I don't want to sell these stocks, I want to pick at them because of their long-term positives.

Don't forget, the rallies in these groups have been monstrous; it is reasonable that the selloffs will be violent. And the whippy action in the actual commodities themselves could be a sign of a total rollover over a parabolic move -- the Helene position -- or it could indicate what I think, which is that this is simply a huge profit-taking experience with the money going to the sidelines and out of commodities FOR NOW.

At the time of publication, Cramer was long BP.

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