Playing the Red Hot Pullback - TheStreet

Playing the Red Hot Pullback

The hotties are cooling, while old tech picks up speed. JJC plans on riding the countertrend to glory.
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Someone's booking some profits here. You can feel it. These highfliers have come back to earth for a few minutes and it is almost as if the rocket fuel that sustained them -- the mutual fund inflows -- has dried up and gone into reverse.

Join the discussion on

Cramer's Latest, go to the

Red Hots Forum

, or visit our

B2B Forum

. Yesterday's action amounts to a wholesale shift out of the hot stocks into the old fuddy-duddies. It was decidedly countertrend. I think it occurred because the funds that keep buying these stocks either stepped away or sold some stock to rotate back into the now "cheaper"

Intels

(INTC) - Get Report

and

Microsofts

(MSFT) - Get Report

and

Motorolas

(MOT)

.

We made the bet yesterday that both could work, that the highfliers have to be bought on weakness (and when I am speaking of highfliers I am talking about the stocks in the

Red Hot index and the

B2B rotisserie league) which we did. But then you have to maintain your core 'Softs and 'Tels as you always have had to for this decade. I would not be surprised to see another day or two where the

Yahoo!s

(YHOO)

and the

E.piphany's

(EPNY)

run into turbulence while old tech romps to the strike (Intel goes to 80?/ 'Mister Softee to 110?) but I am thrilled to be able to buy the hot ones at a discount for a change rather than to have to pay up relentlessly.

Random musings:

Now

Time Warner

(TWX)

is an incubator. It will take stakes in return for ads.

Knight-Ridder

(KRI)

,

Tribune

(TRB)

?

Meredith

(MDP) - Get Report

, anyone?

Snuck out early yesterday to see

The Nutcracker

with the wife and kids. Eight thumbs-up as always. These days are riddled with plays, pageants and stuff that a few years ago I passed up on because, well, business was so, so important. I am not that stupid now, but if my "coverage" seems spotty from here on in for this holiday season, you can bet it is because I am doing the right thing. I urge you to join me attending every school function in the universe. The market will always be here. I wish I could say the same about everything else.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Microsoft, Intel, Yahoo! and Motorola. Cramer's fund also may be long or short certain stocks in his B2B rotisserie league or Red Hot index. 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.