Battle Ready

The trader is scouting for what might come back first. His bet is on the semi sector.
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If we are still in a classic bull market, I would think that the best-acting group on a bounce-back would be the semiconductor and semiconductor-equipment stocks as they are about to report and the numbers should be great.

The

SOX

has had a huge pullback and it would seem that the components could stabilize a bit.

Secondarily, I would -- and have -- bought non-

Microsoft

(MSFT) - Get Report

software. I just think these names will work first

if

the margin selling is over for the day (remember

the thesis: Margin clerks worked early and may be done for the day) because they are all due to report soon and I can't imagine the numbers being bad.

We bought some out-of-the-money calls in that last dip -- defined risk, not a lot of capital.

Of course, the drugs hang in, but I can't countenance buying them up here. If anything, I would sell some to buy semi faves.

How dicey is it? SOX traded down 29% from the high. That's a serious correction. Gotta go the other way.

Random musings:

Net hopes?

Peapod

(PPOD)

gets a commitment for a loan; that could take the pressure off for a few minutes.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Microsoft. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at

jjcletters@thestreet.com.