Feeling the Pain

We now need to face the consequences of an overbought market, Cramer says.
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You knew it had to happen eventually. This market finally got overbought by all traditional measures yesterday, and now we have to feel the consequence: pain.

Overbought is one of those nauseating terms that technically means nothing. It's kind of like overeating. You don't know when you have overeaten. You only find out

after

you have overeaten that you have eaten too much.

That's the way this market feels. You just wish we hadn't bitten off those last 200 points. The whole market now feels collectively that it should have walked away from the table instead of taking its favorites up to heights that were beyond consumption without feeling nauseous.

As I write this, Europe is getting crushed and I think to myself, No kidding. I mean, is there a more unnerving story than this euro? Maybe the Confederate dollar.

And how is that account which bought all of those bonds so stupidly and ham-handedly yesterday going to pay for them? Perhaps by selling stocks?

We've gone pretty much straight up since mid-May. We are due for a pause. These pauses are never painless. But they have to happen if we are going to go higher without throwing up a couple of thousand points because we

keep eating long after we are hungry

.

Random musings:

Don't you think

Chase

(CMB)

regrets ever talking to

Merrill Lynch

(MER)

? I am long Chase, but every time there is a shake-up at Merrill, Chase gets hit. Drives me crazy. Why doesn't Chase just issue one of those statements that

Coke

(KO) - Get Report

did a few years back, saying that those who speculate on a merger "don't have a clue." Right now, everybody always has one foot out the Chase door.

When you ask people why they are critical of

Disney's

(DIS) - Get Report

management, remember, the company gained nothing that I can discern by their dance with

Infoseek

(SEEK)

. They could have bought the whole thing for peanuts a year ago. And still gotten rid of Harry Motro.

And then it hit me.

Amazon.com's

(AMZN) - Get Report

going to be a ... retailer. By the time the company's done, it will be one of those companies I don't ever want to own, slogging it out in every tough business. In the interim, it remains an interesting Net play, but by the time it gets where it wants to go, look out! Retail is a very tough business. On the Net. In the catalogs. In the stores. Period.

I am frantically trying to short some

Qualcomm

(QCOM) - Get Report

here. The company figured it out: The

S&P

adds you, issue shares! It's so brilliant. (

Safeway

(SWY)

did something like this, but this one is positively the most opportunistic action I have seen.) Still, the stock went up big on the S&P addition. This issuance will sop that up, and the stock should go down. I haven't gotten any off yet, but it is a smart move for Qualcomm to take advantage of the moronic pop that always occurs on these things.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Chase Manhattan Bank. 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.