It looks like Wednesday was just another short-covering rally. If things were different, if things were really better, we should have been able to put in two back-to-back days. The big-cap tech stocks look like they just got oversold. There was so much put-buying on Tuesday and Wednesday that we just got to an extreme of pessimism then snapped back.

That was our judgment. No whoosh, just a temporary selling climax that led to a work-off of an oversold position. Or, in English: Things got too ridiculous in a straight line so we had profit-taking by the bears.

Not everything was for naught this week, however. We found a level at which buyers keep wanting to come in: They seem to want to come in when

Intel

(INTC) - Get Report

is below 110, when

Cisco

(CSCO) - Get Report

trades at 50, when

Sun

(SUNW) - Get Report

is down in the low 70s/high 60s.

That's where real buying by mutual funds seems to live.

I think it would have been different today if we had gotten some macro slow numbers. Instead, we just got the flip side, which is estimate cuts on the financials.

Over the next few months, we'll see a balance between macro data that slows and pleases and micro data -- reflecting that macro data -- from companies that they can't make their numbers.

That's what happens in a slowdown. Things slow down. For everybody except foods and drugs. Nothing new. Just like '94.

There will be periods of extreme pessimism during which you can buy stocks. Then there will be periods of extreme optimism, like today at 11 a.m., when you have to sell what you bought. This will continue until we hit the checklist of a couple of days ago.

Any attempt to try to short-circuit the process will lead to losses. Losses have to be avoided because they are what knock you out of the game. I can tell from our

poll results that many, many of you have scaled back or been knocked out. Much of the vaporization is because people bet too aggressively and then kept pressing the bet.

That's wrong. It was especially wrong today. It will remain wrong until the slowdown is visible to all. Until then, rallies like today, after the extreme bounce off of yesterday's bottom, have to be sold. Not bought.

That's how you will stay in -- or get back in -- the game. Reread the

Nightmare series. It isn't right yet. It will be right another time.

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