Catch Your Breath and Do Some Buying

Maybe we should take a few deep breaths. We usually see the markets this oversold when everything that could go wrong is going wrong. Instead, we are reacting to the usual Fed-induced sickness as if we had never suffered it before and all bets were off here on in.

We can understand that a more vigilant Fed means more nausea ahead. But it doesn't mean that we have to vomit up everything we own. Nor does it mean that some people didn't see this coming. This market's been going down for weeks. The Nasdaq's down 8 for the year, for heaven's sake. It didn't just rally huge and begin to sell off.

It certainly is sobering, Some little stocks seem to go up 4 cents or 5 cents a day and then just collapse 16 cents or 23 cents. Stocks in their $50s are crashing through to the next handle. It's an unsightly time.

But to me, selling when the S&P oscillator that I adore is down the most it's been in months -- down 7% -- is against one of my cardinal rules. At the hedge fund, I would say "Minus 5, cover all shorts; minus 7, make sure you are 100% long; and minus 10, make sure you are borrowing money to lever your longs."

To me, there's nothing about this minus 7 that's different from the others. You have to find something to buy. I am picking at the stocks I can pick at in my Action Alerts PLUS portfolio simply because it always has been right to buy here and never right to panic. No one ever made a dime panicking, as I say in my new book.

I see lots of panic, in GM(GM Quote - Cramer on GM - Stock Picks), in AIG(AIG Quote - Cramer on AIG - Stock Picks), in Fannie Mae(FNM Quote - Cramer on FNM - Stock Picks), in Mexico, in the Nazz.

So I am doing the only part I know, buying, not selling, putting money to work into the hideous weakness, recognizing that the "shocking" news of Fed rate tightenings doesn't kibosh everything equally.

And some things, notably the now-compressed oils, can go higher still.