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While most investors are freaking out about Greece, Jim Cramer thinks it would be more prudent to take a closer look at the price of oil, which has much more of a direct impact to U.S. companies.
The price of oil has been hit hard lately, dropping to about $50 during the day on Tuesday from $59 a week ago. Cramer is still in shock, because when oil was hovering around $60 he was convinced that the independent oil companies might provide some real leadership in the market.
But after the latest session of crude being put through the meat grinder, Cramer's opinion has been thrown out the window.
So what could be next for oil prices?
"Now, if there is one thing you need to keep in mind as the price of oil tumbles, it is that this is very much an issue of excess supply," the "Mad Money" host said. (Tweet This)
Looking at the long-term chart of U.S. oil production going all the way back to the 1920s, Garner pointed out that the U.S. has doubled its monthly oil output since the lows of 2008 and is nearly back to its peak levels set back in the 1970s. Thus, unless some sort of unforeseen powerful even occurs, she believes that the oil market will be over-supplied for a long time.
But to really understand what is going on with oil means knowing what the big money dogs are doing with it. That is why Garner took a look at the Commodity Futures Trading Commission's weekly commitments of traders report, which tells investors how the big money is betting in the oil futures market.
Garner noted that when oil peaked in June last year, large speculators held a massive net long position of approximately 460,000 futures contracts. That dropped in half when oil collapsed to $40s in March. According to the latest CFTC report, since the bottom in March the big boys have been buying again and are back up to 328,000 futures contracts.
In other words, big money has used 70 percent of its buying power to bet that oil would go higher, and yet they have failed as it hasn't gotten above $65 a barrel. Garner thinks the large speculators have grown impatient at the weakness in energy prices, and that could lead to a huge wave of vicious selling—like the one investors saw on Tuesday.
Additionally, Garner looked at the daily chart of West Texas Intermediate crude. She pointed out that oil has been stuck in a range of $50.50 and the mid $60s. However with the uncertainty in Greece and the prospect of an Iranian nuclear deal, that could all change.
That floor of support was tested on Tuesday when the price of crude dropped as low as $50.58 and rebounded quickly. But how low could it go?
Garner believes that if oil breaks below $50.50, it will easily fall to $41.40 a barrel. And if that level fails, then a quick drop to the mid-to-low $30s could be possible. She doesn't expect oil to fall that low, but she did suggest that if you are going to bet on oil here, you need to be prepared for it.
Read more from Mad Money with Jim Cramer
Cramer Remix: Beware this sector in a selloff
Cramer's selloff 101—Avoid these stocks
Cramer—Best bargain stocks in a selloff
The good news is that ultimately Garner sees the price of oil recovering significantly to $70 or even $85 over the next 10 to 12 months. However, investors are likely to experience short-term pain before that happens.
"If you agree with Garner that oil could be headed lower here, you have to hold off on buying the oil stocks in order to wait for better prices," Cramer said. (Tweet This)
On the flipside, if oil goes lower than that means that the airline stocks will be headed higher. Cramer recommended Delta as the cheapest option. Cramer's charitable trust has made its bet, and now he's waiting for lower levels before he puts any money to work in oil.