If OPEC says it likes an oil price in the $75-78 range, as it said today, we could be looking at a nirvana moment for stocks. We know that any time oil bounces, the S&P 500 futures go up. Any time it goes down, the S&P futures go down. But if OPEC wants to keep it right here, we take oil out of the equation and make stock-picking matter again.
Right now, the Saudis are telling the big oil-shipping companies that they want to bring 1 million barrels a day into the market straight away to keep oil below $80. That can be used to overwhelm the speculators who are tying up as much as 20% of the oil fleet in the world to keep oil off the market and buoy its price. But they will not bring the oil to the market below $75.
To me, that seems like equilibrium is at hand. If the dollar weakens considerably, the Saudis might have a hard time keeping oil down, but that's not going to knock stocks down.
It's funny, were it not for this linkage, I think we would already be much higher, as many of the industrials, the retailers and the techs are having great quarters, the soft goods -- the Procter & Gambles (PG) (Cramer's Take) and the Colgate-Palmolives (CL) (Cramer's Take) -- are on fire, and one has to marvel at the strength of health care, now that it looks like the Pelosi plan has failed. The banks are acting terribly, undeniably, but they, alone, cannot pull down the market. In fact, they seem to be the market's only real weak link.
So, for the rest of the year, I am looking at a range of $75 to $80 for oil, where you can buy stocks when oil gets to $75 and sell them when it gets to $80, unless the dollar goes down more, giving all of the Caterpillars (CAT) (Cramer's Take) and Freeports (FCX) (Cramer's Take) as well as the Ciscos (CSCO) (Cramer's Take) and the IBMs (IBM) (Cramer's Take) a nice boost!
Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer was long Cisco.
Newspaper ad revenue of 28%, 8 quarters of double-digit drops
Closing Bell: Earnings working against stocks (BCRX, DELL, DHI, INTC, LEAP, PCS)
Chasing Value: E-Trade, a word of caution
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