Looks bad. Feels bad. Feels like we are in lock-in mode. Yes, the managers who loved this market so much earlier in the year are now using this head start on the

S&P

to lock in their gains.

How do I know this? Because that's what I do. It's what many professionals do. We are paid once a year. When we get far enough ahead of the S&P, we like to take something off the table.

Some of our more adventuresome and trusting buy-side compadres like to contract with major brokerage firms to lock in their gains via futures. In other words, they get a collar, or a stop-out that allows them to rest easy down 5%.

When you hear this kind of talk, it quickly gets translated to the notion of portfolio insurance, a product that helped trigger the crash in 1987. If you can't imagine what it was like, imagine if every insurance company had to pay off on a storm at the same time. The insurers would virtually default. That's a simplistic analysis of what happened in '87. (They didn't default; they just failed to insure.)

I say forget about any '87-like analysis. We are in much better shape. But don't forget what it is like for the average portfolio manager who wants to spend some time at the beach. She doesn't want to call in every minute. She doesn't want to have to lug an

Iridium

(IRID)

phone -- not that she would get through to her desk with that anyway. It is much better just to take it off and come back and put it back on in late August.

I know we will try to read more into it. We always do. We shouldn't. This period is when I am envious of you long-term investors out there. This selloff created by the lock-in from a year where people are up nicely in the double digits could be a fantastic opportunity for those who only check out their stocks a desultory couple of times a month.

But for the rest of us, of course, it is sheer hell. Unless you accept the vacation thesis.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. 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.