Seeking Out Weakness

Cramer looks at the latest selling of S&P 500 calls.
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Could it be the shorts feel emboldened by the soggy action in

Yahoo!

(YHOO)

and are now pressing their bets? For the last hour, I have seen persistent selling of

S&P 500

calls. That translates into machine selling, as the brokerage house that facilitates the calls (or makes the trade for them) sells S&P 500 futures or the underlying stocks in the index.

That¿s how

Microsoft

(MSFT) - Get Report

and

General Electric

(GE) - Get Report

, for instance, start heading south. It is how

Cisco

(CSCO) - Get Report

, another big S&P stock, goes from good to bad and is behind some of the drug-stock selling. These are all big S&P names, and they trade down accordingly.

Does that mean you can buy stocks here? That is

never

why I write this column. I just want you to see what I see, and I'm seeing pressure exerted by derivatives trading. That means there is no real volume, no large sellers to drive the market down.

So I want to buy weakness. And that's what I'm doing.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund was long Cisco, Microsoft and Yahoo!. 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.

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