Cramer: Sorry to Be So Prosaic

 | Aug 27, 2013 | 7:47 AM EDT
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Weird, but it sure would make sense to see oil moving up here on the Syria news. If you get geopolitical strife and it involves oil-related countries, there has to be a reason the oil futures aren't going through the roof, and why only gold is running up.

Perhaps it means it's just not as big a deal as the stock futures indicate. Errant military action in a region known for errant military action could hurt the industrials, which have been faring better of late with better Europe and China news. The conflict in Syria will be viewed as one more event that slows growth. But it certainly is not going to bring down Bristol-Myers (BMY), the putative everyman non-cyclical name. That's why today would seem to be a buy day, not a sell day -- because the oil futures aren't ramping. In fact, I might even want to sell gold, which has rallied for a while and is enjoying its seasonal breakout. 

As is usual with geopolitical matters, there will be plenty of funds that sell first and then hope that others sell second and maybe even third, so that those first sellers will be able to get their short positions in. As usual, this hasn't been a great strategy: The slower sellers don't take the market down enough and the tertiary sellers turn out to be buyers anyway, because they don't have enough exposure.

Still, if it is for real -- meaning it will eventually spike oil -- then this is a Chevron (CVX)-Schlumberger (SLB) deal. Or, if you want to get all domestic about it, it's a day for Anadarko (APC), EOG Resources (EOG) and Halliburton (HAL), with the latter acting so well that you'll have to think that something's going on.

But let's play it out. Let's say the U.S. sends cruise missiles in to kill Syrian President Bashar al-Assad. They fail because the Assad didn't just fall off a turnip truck. Then Russia warns the U.S., and the U.S. says this could lead to a global conflict. Then gold spikes some more, and then we get some sort of resolution, bloody or not -- and then gold comes down, and the advance continues after a 5% drop. That's unless, of course, we get a flight to safety toward U.S. Treasury bonds, and then it is just a 2%-to-3% drop and then some end-of-the-month markup.

Perhaps if it doesn't resolve itself by then, we'll get some Friday selling, prepping for a long weekend -- and then we are just playing for the employment number at the end of the week.

I guess I just, once again, default to a Bristol-Myers scenario, except this time Bristol looks real good cause it's down.

Also, I think it might be tempting to take some AGCO (AGCO) or Deere (DE) or Monsanto (MON) on any overall market weakness. Those stocks have come down too much vs. the commodity prices that seem to be trying to rally.

If you think there's going to be something more to it, allocate some money to S&P 500 puts. Take down some insurance. But I just don't think you need to reposition your portfolio on this. That's something I might be tempted to suggest if oil were running to $110 per barrel, because that would mean that gasoline would take out its highs.

Sorry to be so prosaic but, in the end, the market is nothing if not prosaic when it comes to geopolitical strife. This time should be no different.

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