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[Ulisses Pereira]

"Getting Oversold This Week to Rally Next"

By James J. Cramer
11/17/2003 12:15 PM EST



"Real panic. Happening right now. With a flight to quality for a couple of Cloroxes (CLX:NYSE - commentary - research) and General Millses (GIS:NYSE - commentary - research). Nasty and ugly and going lower.

Yep, we are in the process of getting oversold as I write, with no real bounce this time. I continue to believe that this is a direct fallout of the debasing of the dollar and the debasing of the mutual fund industry, coupled with a phenomenon of profit-taking in single-digit land.


All this year, the best-performing groups have been the lowest-quality groups, stuff like Lucent (LU:NYSE - commentary - research) and Nortel (NT:NYSE - commentary - research) and JDS Uniphase (JDSU:Nasdaq - commentary - research). Suddenly these are under huge pressure. I am wondering if this is some sort of lock-in either by impatient traders or mutual funds that don't want to lose their big percentage gains.

Impatience, because none of their quarters were that good. Mutual funds, because heck, they're many of the dinged players on these lower-quality stocks.

I know it is painful to take a pasting. I imagine if you could juke and get out to get in when this selloff ended as the market got oversold -- but you know what? I think it is too hard.

I would just stay the course. I have some money on the sidelines that I, for one, am anxious to put to work in the little dollar stocks that are crumbling, provided they are deleveraging and have better balance sheets.

Again, I think this week is a weak one. Next week starts the rally. "

(in www.realmoney.com)