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TheStreet Open House

Don't Be Shaken by Explosions Abroad

This column was originally published on RealMoney on July 11 at 10:53 a.m. EDT. It's being republished as a bonus for TheStreet.com readers.

When does it matter when you are overbought? When you have a train explosion in Bombay, that's when. If you are oversold, we send India down and cordon it off. When you are overbought -- and we are still way overbought -- you get the U.S. market rolling over.

Of course, Bombay is simply not significant to the earnings estimates of Bristol-Myers (BMY), my endless example of what you need to focus on when these extraneous exogenous events occur.

Why do I say the train incident doesn't matter? Because tomorrow's wires will not have this story, and this market's institutional memory is about 10 minutes. What's more important to watch is the dangerous way that stocks are starting to encroach on their hard-won gains from after the last Fed meeting. What does that encroachment say? It says that earnings woes are already supplanting Fed relief. Hence the endless increases in Coca-Cola (KO), Altria (MO) and UnitedHealth Group (UNH), which all have become horses.

What will get sold on this news out of India besides the indices? Why, tech, of course. It will get hit today, again, I believe. The SOX? Feeble here, and there's probably worse to come.

At the time of publication, Cramer was long Bristol-Myers Squibb, Altria and UnitedHealth Group.

Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Listen to Cramer's RealMoney Radio show on your computer; just click here. Watch Cramer on "Mad Money" at 6 p.m. ET weeknights on CNBC. Click here to order Cramer's latest book, "Real Money: Sane Investing in an Insane World," click here to get his second book, "You Got Screwed!" and click here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by clicking here.

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