Play This Week With a Steady Hand

They're all right there. Don't you feel it? Hundreds of stocks at resistance. Hundreds have formed a nice base. The Transports and the Dow are moving in synch. The earnings period surprisingly great, with so many companies not stung by the raw costs. Three straight up weeks, with all the commodity stocks showing signs of rolling over; most at crucial "must hold" levels except for gold, which has already crashed, making the inflation case much dimmer in the eyes of the traders.

Yet, you simply can't read the papers. They are too awful. The cost to the consumers for everything from food to gasoline is humongous and going higher, according to all the food execs I had on last week. We are getting nowhere near a bottom in housing. The layoffs, while not significant in the Labor Report on Friday, sure seem endless. The two major presidential candidates from the Democratic side want to tax the oil companies into oblivion, the leaders of the last year. Exxon (XOM - commentary - Cramer's Take) blew the quarter. So did GE (GE - commentary - Cramer's Take).

Too far, too fast, based on those grim items.

To me, this is the first week since the Bear Stearns (BSC - commentary - Cramer's Take) bottom that I think seems aimless.

But perhaps there's a "split the difference" way to approach this week: options expiration.

I expect the bias, once again, to be upward. I have been noting that there's money coming in for some time. The talk about Deutsche Telekom (DT - commentary - Cramer's Take) buying ne'er-do-well Sprint (S - commentary - Cramer's Take) fits that picture. Strong-currency Europeans and Asians have stepped up their buying. Sovereign funds quietly taking up positions, like the odd building up of BP (BP - commentary - Cramer's Take) right at what looked like levels that could not be supported. I expect more of both.

But one of the days this week will be a big down day. We will hear plenty of reasons why it happened, yet it will probably really be caused by option balancing.

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