At what point are oil prices too low to keep helping the stock market go higher?
Jim Cramer thinks we have found it, with declines across the board seen in the Dow, S&P and NASDAQ. Sellers are worried that there could be something lurking under those plummeting prices of oil, even as there was a $3 rebound from the hideous oil session on Friday.
So what is Cramer worried about? The negative ripple effect from overseas. If the collapse of Cyprus could affect the banks in the U.S., then a collapse in oil-dependent Russia certainly could have a large impact.
Oil prices dropping are just a symptom to indicate that it is getting worse. That could have a positive effect on the U.S. economy.
"In the end, though, the money flows here, and therefore any decline is buyable after a couple of sessions of weakness," Cramer said.
The "Mad Money" host recommends buying stocks that are not so economically sensitive, such as health-care, biotech or travel and leisure stocks.
The chain reaction to low oil is just too good for Cramer to ignore. Yes, there will be a downside, but he thinks that it's manageable. Now is the time to buy on oil's weakness.
After the hideous decline in oil on Friday, how worried should investors be? Jim Cramer turned to one company whose stock has been crushed by the outright collapse of crude.
Cramer spoke with Magnum Hunter Resources Chairman and CEO ,Gary Evans, to take his pulse on the drop in crude oil.
"The bloodbath is for everybody. It doesn't matter whether you're an oil company or a gas company, we are all being treated the same," Evans said.
The CEO also added he has not been bullish on oil for almost two years, as he recognized that oil prices were unsustainably high. As a result, 60 percent of Magnum's production comes from natural gas and he anticipates it will rose to over 90 percent by the end of December.