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?
To find out, Cramer turned to the help of Carley Garner, a technician and co-founder of DeCarley Trading, and a colleague of Cramer's a tRealMoney.com.
"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)
"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"-Jim Cramer
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.
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