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Opening Segment 1
Title: |
'Cramer's
Game Plan
For Next Week'
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Featured Stock(s): |
BP plc (BP)
Permian Basin Royalty Trust
(PBT)
ConocoPhillips (COP)
Williams Companies,
Inc. (WMB)
Compagnie Gnrale de
Gophysique-Veritas (CGV)
Oceaneering International,
Inc. (OII)
FMC Technologies, Inc. (FTI)
Smith International Inc.
(SII)
See Opening Segment 2,
below...
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After this segment, you
can see Jim's Lightning
Round picks
here... |
JJC:
I'm just glad this down-3%
week is over. Yeah,
we had to bring his head
out. Making a
statement. That's
the last time you're going
to hear bear, or see it.
Anyway, another crummy
session behind us, what
are you going to do?
We could dwell on it, we
could put a lot of decos
underneath... That's
the yellow thing
underneath. Or, I
say we could focus on
what's going to happen...
What's going to happen
next, not what happened
already... That
doesn't make you money.
Next week is a shortened
week. Thank heavens.
This market needs to catch
its breath. The
declines have been brutal
and swift and
nightmareish, except for a
handful of companies that
provide energy worldwide.
Which brings me to next
weeks Game Plan...
. . . .
.
This coming Wednesday, at
10:30 a.m., a number will
come out, a sainted
number... It's
called the oil inventory
number, and it will cause
considerable angst and
hoopla. Hundreds of
thousands of traders will
be fixated on it and I
frankly think it's
absoulutely right to cover
it with a full court
press. It will be
full of sound and fury.
But it signifies
nothing, because it makes
you no money. And
we on Mad Money are not
about to pay attention to
something that makes us no
money. In fact, this
inventory number is what I
call a contrary indicator,
an indicator that you
can't ignore because if
you go against it, I think
you'll get your best trade
of the week. And the
Game Plan is all about
trading, the only time
during the week I
reccommend them.
. . . .
.
Every week for the last
year, we have seen this
domestic inventory number
come out, 10:30, and it
usually comes out where
it's supposed to be or
where it's predicted by
short term traders who try
to gain the next dollar or
two of crude prices every
wednsday. Sometimes it's a
little more than
predicted, meaning that we
have a little more oil in
the US system than we did
the week before. Sometimes
it is a little less than
predicted, and then the
world goes insane at 10:31
after the number comes
out. Take this week... The
numbers were a little bit
high and the price of oil
immediately plunged,
dropped $4. What happened
was all the stocks we like
here on Mad Money,
including the series of
clean coastal drilling
stocks we featured this
week just got pollaxed,
spindled, mutilated
anilated, pancaked... Or
to use our favorite word
here on Mad Money... They
got pantsed. All, mind
you, because of this
plunge in the oil futures
casued by a domestic, not
a worldwide, not a Chinese
- a domestic inventory
number that was a little
too high. So what happened
the next day? Did we just
dwell on that? Do you
think it must have gone
lower, right? Futures
signify the inventory
bill?... No. Crude rallied
$6 bucks and went to an
all time high. Now, what
happened to that
invenvtory that everyone
thought was oh so
important? Despite the
abjectly horrible nature
of the market yesterday,
many of the oil stocks
bucked the trend... Some
rallied, most stayed even.
How can this be? Doesn't
the domestic inventory
number control oil? No.
Hardly... Think of it like
this... Recall that I just
said every week, every
wednsday we get a report,
and it's pretty much in
line, plus or minus, and
everybody goes nuts
selling the oil and gas
stocks if the inventories
are high and buying them
if the inventories are
low. Yet, what has
happened? What happened in
the last year despite this
up a little, down a
little, up a little...
What happened is that oil
has doubled. So I don't
think its direction, its
pricing over this period
had anything to do with
any Wednsday's number, or
any particular inventory
number. So what do we do
with this insight? I say
we use it to our
Cramerican advantage. If
this number comes out next
Wednsday and it shows a
big inventory bulge...
What are we going to
do?... You think maybe,
what we should do is
panic, and sell with the
maddening crowd?... No,
no. We're going to utilize
the information I just
gave you, the contrary
information and we're
going to buy the oil
stocks. We're going to go
buy the ones we like and
we're going to use the
moronic hair trigger
selling by everyone else
who's uninformed to our
advantage.
. . . .
.
For those of you who are
looking for a relatively
safe oil play with yield,
how about you sit there
and buy some
BP plc (BP)
with a near 5% yield. For
those who want a
humango-monsterous yield I
think you should purchase
Cramer-fave,
Permian Basin Royalty Trust
(PBT),
a yield double BP. You
want something a little
game, then I'd say go with
ConocoPhillips (COP),
the most integrated,
balanced refiner, with
natural gas. If you agree
with Cramer about this
year being the year of nat
gas, how about this one?
How about picking up some
Williams Companies,
Inc. (WMB),
which had the misfortune
to report yesterday. It
reported one of the
greatest upside surprises
I have ever seen on a
down-358 point day...
giving you the good
fortune to be able to buy
it at prices much lower
than it should be trading.
How about a coastal
drilling play?... because
you realize that the
momentum is there... We
featured a bunch of
them...
Compagnie Gnrale de
Gophysique-Veritas (CGV),
Oceaneering International,
Inc. (OII),
FMC Technologies, Inc. (FTI),
Smith International Inc.
(SII),
and a player to be named
later. That ladies and
gentleman, is called,
because I am such a TV
guy, a tease.
Now here's the frustrating
part of the gameplan...
The big caveat...
. . . .
.
Okay here's the big
caveat.... The big cabiet
that could make everything
I've said irrelevant. If
we do not get a build in
inventories that causes
the price of oil to
plunge, along with
everybody in the oil
patch, then there is
nothing to do at all.
Trade cancelled. We will
simply have to wait for
the following week to get
another chance. The bat
stays on our shoulder.
I've got both bats out
because I want you to
remember next Wednesday.
You don't get the
inventory build, you keep
the bat on your shoulder.
. . . .
.
The Bottom Line!:
Here's my recommended,
truncated Game Plan for a
truncated week. Wait for
your oil pitch. If
it's grooved, if it hangs,
if it's juicy and fat,
swing for the fences.
If it's outside and can't
be hit, just say, Happy
Fourth of July, and move
on.