From a seasonal perspective, oil tends to trade downward through early August. However, Garner took a look at who owns oil futures right now by comparing the weekly chart of West Texas Intermediate crude to the results of the Commodity Futures Trading Commission's commitments of traders report.
Every week, the CFTC measures the net long or net short positions of large speculators, small speculators and companies buying and selling oil futures. Garner reviewed the large speculators, because it indicates what big institutional money managers are doing.
Garner found that when oil peaked in June, large speculators accumulated a position of 370,000 futures contracts. This was the biggest bullish bet by big money since before the oil collapse in mid-2014.
Such a large accumulation of futures contracts worried Garner, as it means it is only a matter of time until money managers are forced to liquidate and cause the price of oil to fall. Since that high in June, the price of crude has declined by approximately 20 percent, and Garner says this is a result of liquidation.
Garner thinks there could be plenty of more pain to come, as crude tends to bottom near 200,000 futures contracts.
"If that is where we are headed, and Garner believes it is, then she would expect oil prices to fall to the mid-$30s," Cramer said.
In her experience, bottoms in oil tend to be very dramatic and painful as weak-handed bulls are flushed out. Unfortunately, she said the market hasn't seen a real washout yet. She expects oil to fall to $38.50 or even $32.50 a barrel if things get worse. She thinks it is more likely that oil will push its floor of support at $34.50 a barrel, and if it holds, then crude will rebound.
However, if oil breaks down below $35, Garner anticipated that things will get really ugly. In fact, there would not be much of a floor for support until the mid-$20s. And if oil doesn't hold above $25, traders will likely eye $15 as the next floor of support.
Garner does not expect things to get that brutal, though. She thinks oil will more likely turn around at about $35 a barrel.
Ultimately, Garner wouldn't be surprised if oil rebounded to $48 or even $68 per barrel if the strong dollar decides to weaken again.
"While Garner thinks oil is headed lower from these levels, she is not exactly bearish. In truth, she thinks you should prepare for what could be a terrific buying opportunity in the mid-$30s before we bounce back," Cramer said.