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[Ulisses Pereira]

"Tech, Step Aside for the True Growers: Oil"

By Jim Cramer
RealMoney.com Columnist
6/12/2007 6:44 AM EDT


"Contrast the Oil Service HOLDRs (OIH - commentary - Cramer's Take - Rating) with the SOX.


These two charts tell an important story about this market. The OIH was trending up as we went into this selloff, and I believe with a small push it can take out its high.

The SOX was trading down going into this selloff and I believe it will only be worse today after the Texas Instruments (TXN - commentary - Cramer's Take - Rating) hammering. (TXN would be down more but there's a lot of pressure from options for the stock to finish at $35.)

The charts show a secular bull and a cyclical bull. That's right, I believe the oil service companies are in a multiyear bull cycle as they remain the hope for the hydrocarbon dominance that is so much more important than every single alternative energy. I believe the semis are cyclical and experiencing a seasonal downturn.

I point all of this out because of the contrast between this selloff and the selloffs of last year. Last year the money poured into safety after the selloff, and then went to tech.

Now it is going right to the new secular growers, as people recognize that a Schlumberger (SLB - commentary - Cramer's Take - Rating) will have more outyears of growth than a Pepsi (PEP - commentary - Cramer's Take - Rating) or a Coke (KO - commentary - Cramer's Take - Rating). And much more than a Texas Instruments or an Intel (INTC - commentary - Cramer's Take - Rating).

Yet, when I talk to people it is the latter group, the SOX, that they still want to reach out for at the end of a selloff, like it is 1999 or something.

The charts aren't lying.

They tech buyers are. To themselves. "

(in www.realmoney.com)