This column was originally published on RealMoney on June 23 at 3:52 p.m. EDT.
When 1.3 billion people panic, the oil market takes notice. That's the takeaway from Thursday's crude jailbreak to $60. Despite steady inventories, no sign of shortages in the system, and what should be a benign moment for oil, traders seized on the Chinese government's bid for
-- oh excuse me,
is the government after all -- and took oil through levels that most of us thought wouldn't happen ... heck, and I've been an oil bull.
We might have been able to overlook the panic
hadn't directly referenced higher fuel costs and the slower economy -- as in "Duh, didn't you know it was slower than before?" That $60 might not have caused such a negative reaction.
But the $60 sent new shivers up the spines of all of those shareholders of cyclical companies that have been able, so far at least, to keep their margins up, even though they use a lot of energy.
So, down went the airlines, despite the recent news of prices sticking. Down went the chemicals and wood products and the real estate plays and the retail plays that have been sustaining us.
What do you do?
I think you wait. When the price is fully discounted, then you buy, but not what you've been buying. The switch will now come to companies that can grow their earnings despite oil.
The only two groups that fit that bill, surefire, are oil and oil service, and tech.
And that will be Monday's target of opportunity. Why Monday? Because panics don't blow over in a day.
Three days, though, and you are there.
James J. 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
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