If You Must Short Oils, Here's How

Short the oils? How tempting. They have these two-day rallies and then they get crushed again.

But I keep thinking of Devon (DVN - commentary - Cramer's Take). If Exxon (XOM - commentary - Cramer's Take) -- poor, pathetic but rich-as-all-get-out Exxon -- were to go buy Devon, it would be finding oil at $16 a barrel. You would get pretty much the same deal at Anadarko (APC - commentary - Cramer's Take). That's how much the stocks have fallen.

Yet the market is anxious to play whack-a-mole with anything that is up, and we have inventories tomorrow. If you are a short-seller, you set up an aggressive short of these names, and then you take advantage of the inventory number tomorrow and blast the oil futures down through $110 and really clean up.

How can that be done? Simple: The inventory number has two components -- the amount of gasoline in the system and the amount of oil. It has been almost impossible to have both of these be lean. If you blast the oil futures, you can create an impression in this thin market that the numbers are bad and get away with it.

No, I am not dreaming. Remember what Jim Hackett, the CEO of Anadarko, told me yesterday. There is incredibly strong demand, industrial demand, for $8 nat gas. But the futures say there isn't. Does that mean Hackett doesn't know what he is talking about? I don't think so.

Again, the short term is real bad for nat gas -- bad season, glut being talked about endlessly, no champion in Washington. They favor nukes and solar down there, even though the former is an impossibility and the latter generates about a half-day's worth of energy per year in this country.

But the stocks know there is demand. Wait until the nefarious ones come in and execute the plot against the futures.

Then buy.

Or short and then cover.

Random musings: Has Dick Fuld of Lehman (LEH - commentary - Cramer's Take) done anything right, anything at all, with this crisis? Is there a wrong move missed? It is catastrophic. I have lost a lot of confidence in him. ... Retailers are coming in; I would buy them down 3%-4% from here, except Macy's (M - commentary - Cramer's Take), which I would buy now.

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

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