I would do this trade right into today's action and double down next week if there is a cliff jump, because I believe you will get a barrage of number cuts that will make things easy to stay short.

I am making no judgments on the resolution of the cliff itself, just on the quarters to be reported because of a uniquely poor set of circumstances that will hit a reset button on the whole cohort. It can be looked at to the long side once the numbers are through cutting and the inventory is worked down to where gross margins can expand again.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.


Three Key Themes for 2013

Posted at 6:30 a.m. EDT on Thursday, Dec. 27

Three trends that weren't supposed to happen in 2013: a strong euro, weak oil and positive gold. These three trends have to be explored, because they are pretty difficult to fathom but must be fathomed if we are to understand 2013.

First, the euro. We all know that the euro was supposed to be kaput by now, replaced by the mark, franc, lira and everything else, with the mark starting the trend. This was a total misread of history and of the denouement of World War II. There's no way that we could ever understand the depth of fear of another war or the guilt the Germans feel. They are simply not going to let this happen. We focused only on the economics of it, not the politics, and the richer countries are willing to lose money endlessly on Greece if that's what it takes, because Spain, Italy and Ireland are coming back, as is the European stock market. The bankers and hedge funds in this country are way too smart for their own good, because they know the numbers but not the history. The euro could go higher still, because I sense that no one large owns it.

Oil is a function of supply. It is beginning to dawn on people that the statistics for the U.S. are far more robust than what the numbers and predictions indicate. Every month, numbers coming out of Texas and North Dakota are much better than people expect. Endless upside surprises, and yet most of the big interests aren't even drilling there yet. The major oils are slow of foot and let the independents in while they focused on unstable areas such as West Africa and Indonesia, both of which will perhaps be ... confiscated by poor countries that mistakenly gave them rights. The whole federal-lands thing is a big sideshow.

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