Cramer: Oil Throws in the Towel

 | May 02, 2017 | 2:49 PM EDT
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Oil's relentless. It's been trying to rally each day but finally it just gave up the ghost today and broke down to $47, which had been my target when it was back at $53.

Can it hold?

I think this is the level where the actual producers stop selling the futures, which, while it doesn't produce a buyer, does make the whole process seem to have more hope.

My charitable trust has positions in the group and it has been horrendous, as bad as I can ever remember except during that mid-$20 swing back at the beginning of 2016, and I think it acts as if it could be headed there. 

I think that's not going to happen only because it doesn't make sense for the producers in the Permian to keep pumping as aggressively as they have, as if they know it is going to sow the seeds of their own supply destruction.

We have been waiting and waiting and waiting for this breakdown to commit to some of what we sold when oil spiked to $53. But we need to see these big levels on stocks like Schlumberger (SLB) really taken out and get that cathartic selloff in the common like we are getting in the futures. (Schlumberger is part of TheStreet's Action Alerts PLUS portfolio.) 

It's not happening yet.

So we aren't moving yet. With this monster, it has paid to bide your time every time.

That's just what we are doing.

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volatility is quite low here, and we could see some downsides here in the short term. ...



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