Sure the tape's going to be crummy tomorrow.
failed to meet expectations, and the market looks like it's wildly for sale. As I left the office tonight you could pick up any of the quality tech names, from
down a buck and a half from the last sale.
Tell me something I don't know. Tell me what is going to bounce first.
The dilemma we all face in this market of perfect information is that much of the market will be taken down at the opening because of Intel.
But then much of it -- barring a bond catastrophe -- will spend the rest of the day basing or trying to find footing to work its way back.
It's that regaining of footing that intrigues me. I have plenty of positions I am looking to buy into weakness tomorrow, but the question I have to face is how to figure out what will bounce and what will continue to cascade.
Let's be simple and break the market down into a few distinct asset classes: defensive growth, cyclicals, the Net, PC tech and the
(I am sparing the financials because if you want them right now you should just buy bonds, which seem somewhat tempting to me here, but I have bought none so far. And I am not covering cyclicals because they don't trade together during earning season, as each business has a different cycle and generalizations don't work right now.)
First -- don't laugh -- let's analyze PC and PC-related tech. If Intel were an atomic bomb, these stocks are ground zero. I tend to think that nothing lives at ground zero on the Wednesday of an Intel disappointment. But I am lean in this group and so far I am not hearing that demand was an issue. That leaves open the possibility that a stock like Microsoft could rally as things calm down toward the end of the day. I earmark that with a price of 90 and change as something I might want to buy.
Defensive growth seems very right to me. I would think that people might rotate into nonearnings-risk names such as
. I bought a great deal of those in the last few days and I think that bet might pan out. I would be interested in sticking some bids in for drug stocks that are pulled down by programs.
The Net -- now here is the quandary. As long as Intel says demand stayed strong, I would think you would have to buy the Net if it got hammered. These stocks have a cycle of their own. That's why I was buying more
and AOL as I was leaving the office tonight.
Finally the Red Hots. Here is a group that seems leveraged only to themselves. It declined 3% today after three wild up days. I know these stocks have the best earnings momentum there is. That said, these stocks have very, very vicious corrections. I think these, however, might be the place to be. They are growing much faster than Intel and still have their quarters ahead of them.
That intrigues me. When the Red Hots drop another 3% to 4% tomorrow, I am stepping in and buying more of my faves. They should turn first. That's where I will be looking the hardest for opportunity.
James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Procter & Gamble, Colgate, Intel, Yahoo!, AOL, Juniper, Redback, VeriSign and Conexant. 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