so what's happened this week? sure enough, when general mills reported a very good quarter, the stock exploded to the upside. when bed bath & beyond also reported a very good quarter, it got clobbered. paychex, it said nothing good whatever about the employment rolls and that trumped pretty much everything else. so it's time to admit a bit of a bullish defeat. it's time to admit that the negative scenario that i laid out last friday is now playing out, which means we have to get a little bit more defensive here. that's what i'm doing from my charitable trust all day you can follow it all day at action alerts plus.com. i've been taking profits in some those big industrial stocks that i told you to do on friday if you saw this pattern. i've been going into more defensive names as i told you to do in the game plan because of this pattern and it's because the market ended up liking generals mills and despising both bed, bath and paychex. in other words we have to be a tad more cautious. because the game plan said that if the market, as judged by the collective reaction from the news from these companies, chooses defense over offense, if it chooses the safety stocks over the aggressive ones, then we have to pull in if not bite our horns, just to show you what a classy guy -- i went to harvard. ugh. and then for the momwe pull on our horns and pause in our land of the 10,000 bull dances. ba-ba-ba-bum. i was trying to cue the staff and the staff's real good and i'm not. the stocks are making sense. letta out in the postproduction. the stocks are making sense and even if we don't like what they're say, i regard myself as kind of a stock whisperer is kind of like a horse whisperer when you more profitable and i'm telling you the game plan must be obeyed. not not-just that the stocks are saying that we need to be more negative either. we got bad number, those macro numbers. these existing home sales came out today 'they were disappointing. challenge my positive thesis. we need to see the numbers to continue to improvement, they didn't. oil got clocked all week. that shows us the world wide economy isn't strong enough. it's -- it is deflationary. and it helps us prove the defensive thesis. my old friend dr. copper, the red medal that goes into pretty much all construction, has been getting crushed this week. that's the macro data, that's the stocks talking, but let me give you the real whisper that i think about. let me give you the most worrisome sign of all. i heard someone say on tv yesterday that dow 10,000 was a forgone conclusion. admittedly that's when we were running very close to dow 10,000, but i wanted to reach for the sell button to say nothing of the moot button the moment i heard it. that, plus the immediate reversal in the market right after that dow 10,000 call was uttered, made me think, wait a second. don't ignore the game plan that you laid out on "mad money on" on friday. we have to do it, which is why i told you last night that i'm expecting a 3%, 5% decline in the market and sticking by that production, which is again, a follow-up of the game plan. dow down 9,000 is a more forgone conclusion now than dow 10,000. so why say anything good about stocks? why come out and ever talk about stocks if i feel like we're in for a pullback especial low when i'm cutting back on industrial exposure in my own charitable trust because i'm a believer in broader themes that we can fall back on as the market goes down. themes that don't wilt with the economy. themes that give you a place to buy, once we're down 3%, 5%. i always leave room it buy on the way down. i wouldn't start to go down three. i always buy in increments so you have some left if we're down five or if it goes down seven. most important i always have a shopping list ready for when stocks go lower. as i said on the game plan on friday and reiterated last night, one theme they don't care about any near-term geirations. i didn't know what research in motion would report but i didn't care. like apple. sure enough rimm disappointed tonight. you're getting your chance to bate best smartphone at rimm reduced prices and another chance to buy at&t. comscope. because of rimm's decline. as i said about this mobile internet thesis i'm a believer and i couldn't leave these stocks if i tried which by the way is the monk's first corolla corollary. the other longterm thesis is aerospace and last week's game planner i said if obscured aircraft maintenance forecast companies said good things, a good idea to use any market weakness which again is what we're having to pick up aerospace names like boeing. arr said good things and boeing's coming in. more for a 3% yield i think it's worth snagging and the defensive stocks that we like, eat, drink or medicate yourself with or of course legally smoke. you don't have to think much further than procter & gamble when you are trying to figure out how to get more defensive which is i why i own it at my charity trust. and looking at kimberly clarke. benefits from the reversal in the dollar. i think that it will stay weak and cheap natural gas but the most important takeaway for you home gamers here. is a game plan arrived out on friday and i do one on every friday. ahead of a week that certain milestones that are embeded that could trigger in your stance how much short term cannot be rationalized in the heat of the battle. that's why we make the game plan. that's why it's so important to know what you'll do in f any bad events occur. so they don't overtake you, blind you, stun you to be a stock market victim. of course, this is rule number 25 in my book that's not even out yet. getting back to even. available in book stores andth. you have to know what caused your mind about the market before it happens. otherwise you are just going to make excuses for sticking to your same view. we can't do that no matter how wrong it is we can't stick with it. the game plan says, sell. the bottom line, we're staying defensive until proven otherwise. tomorrow night i will lay out a game lan for next week so we'll know ahead of time what could cause us to change and make us more upbeat but for now we're in the midst of the 3%, 5% sell-off, aided by the rimm bad number tonight, and don't forget about this market's longer term positives while you're watching it come down. we're going to start the calls with kurt from california. kurt? >> caller: hey, jim, this is kurt. and you might not want it, but here it is. 102 degrees. three hours sitting in traffic in southern california. boo-yah. >> wow. what an aggravation boo-yah. that may be the most aggravated that could be a road rage boo-yah. not road rules but a road rage boo kbrap. >> caller: it might be. "real money" and thank you what you do. it's an honor to be on the program. >> it's an honor to have you. in paperback sold only 483 copies this week but i don't count. okay, go ahead. >> caller: all right. many relate to these drop in the markets, do drop in oil price, crude oil. however i believe it's part of a natural -- it was bound to happen before the market turns towards the upside again in early 2010. excluding the energy sector why would a dplop crude oil negatively impact stocks? wouldn't it drop in crude oil stimulate the economy, lower prices, equal reduce local operating costs? thank you. >> kurt, kurt, you raise a logical question. you're begging for rationality in a market that's irrational at times. this market is saying that when oil comes down the economy's too weak. you and i are in agreement. oil comes down, it's antiinflationary and it's bullish for the american consumer and it reduces the tax but we must obey mr. market. he says right now, short term, we have to go down if oil's not strong enough. so, why? because kurt does ultimately have horse sense and also road rage, when it goetz 2010, we can start being more positive. hopefully it comes down enough that we can be more positive before 2010, though. we y don't we go clear across country. why don't we go to bob in new york. bob? >> caller: boo-yah, jim. thank you for taking my call. >> my pleasure. bob is that long island? >> caller: southampton. >> there you go. what's up? >> caller: we've been watching qualcomm make lower highs and lower lows since july. >> right. >> caller: we ran a regression analys analysis. one-year time period the future looks great but if you run it for a longer period of time it looks like this stock is going to move sideways as well into the future. what is your take. >> bob, you're regressing if you're using regression analysis. as i told my previous caller kurt from his road rage situation developing in southern california, we do not want to put that kind of rationality to a market with animal spirits. call com, which i own in my charitable trust, has the best 4g platform. it's best stock they feel about in 2010 and although i feel shaky about it right now because it had such a big move. so i'm in the disagreement with bob. i'm in agreement with kurt over -- but over the long term, scurt anything to rock. all right, stay -- oh, my, it's the land of 10,000 bull dances. ♪ i'm a phony baloanee no i'm not phony. stay offensive until proven otherwise. you have to know what can change your mind before the market -- before it happens. that's why we do the game plan and cut out that part that i had earlier that i said was a plic take. so stick with cramer. coming up in this dangerous age of atms of mass destruction, jim helps you stay safe by sentencing three of them to the sell block. still ahead, try to keep up with cramer as he takes your calls rapid fire in an all-new lightning round. and later, cramer's been stumped. you put him to the test and jim's done his homework. now the wizard of wall street has your results. on this show, and this show only, we are running a nonstop jihad against toxic ets, approved by our securities and exchange commission that don't do what most investors think they do. i'm talking about poisonous financial products that could blow up in your face because they're designed badly and some of the major firms are starting to ban trading them. or how about an oven that you knew could burn your whole house down or heaven forbid toys that may give your kids lead poisoning you could bet that the media would get whipped into a frenzy and all kinds of consumers advocates would demand that the product be recalled, probably acorn. even if they come with disclaimers to tell you they don't work like they do. disclaimers of course that no one reads or knows about. maybe you want a different religious metaphor. call me a crusaders for the nonproliferation of mass destruction. remember, listen to my lingo. i'm not saying i don't work the way they're supposed to. i'm saying they don't work the way that you think they do. these are ones that could lose you a lot of money for reasons that are totally unrelated to what you actually think you're betting on. and that's why i was so thrilled that my colleague don diane at the street dwrm i am chairman had written a series of articles of what he saw the ten most dangerous ets. perfect for "the sell block." don is the kind of watch dog that you and i need. promoted safe and approved by the s.e.c., i think they should really be bannings darn things and the federal reserve should get involved because they circumvent the margin rules. tonight for your protection i'm putting the three. in the maximum security ring in the "sell block." no possibility of parole. i would like to use cruel and unusual punishment against them. eighth amendment get in the way. by the way another way to junk the whole bill of rights with the obvious, amendment number two. what does don to be the considered most dangerous etf? go back, count ways backwards. i couldn't agree more. the direction daily financial bull 3x shares, you might know it as the symbol because it's most actively traded the most of the days. the xaf and the direction daily financial bear 3x shares the obverse and the f, a, z. you know i hate etfs that give you double the buying or selling firepower for every dollar that you put down. i spent months going after the skf which i think allowed unscrupulous market players to short to financials with double of firepower of an ordinary sell. i think they probably cost you and me bengals of tax dollars. well, the fas and the faz from direction are even worse, according to don, because they give you triple the firepower. the first to buy, second to short. the problem with these triple leverage funds, either alongside like the fas or the short side like the fa where is the same. you may think that the fas is letting you longer term on the financials because of lots of leverage and the faz let's you bet against them with lots of leverage. that would seem to be good, right? either the financials go up and you make money in the fas or they go down and you make money in the faz. isn't that how it works? no, not at all. the way i siesy it these product are sold for daily traders. not you and me. you could lose money in both. these funds are designed to give you triple the return of underlying index but only on a daily basis. at the end of every day the fas and the fav, like all of other double and triple-leverage funds reset. which means every day you start from scratch. the more underlying the indexes is the more it eats into your return. the prices for both of these funds were down so much even the financials have been one of the leaders of this market that they both had to do a reverse split. that's how a triple long funded and a triple short fund in the same sector can both stink and it's why the fas and the faz plonin the "sell block." consider them on stocks. do the arithmetic. do you not get back to even that way. getting back to even, it sounds like a good book title. that's what constantly wpz these etfs. second most dangerous etfs in don's book? let's reiterate it. people are trading it like there's no tomorrow. a warning from don, about the united states natural gas funds fund. it's called the umg. even as natural gas prices have rebounded hard in the seven-week rally that we called a dram dramatic rally the ungs done nothing, basically nothing. i think that you could do much better in the actual stocks they recommended. xto, anadarko, apache, lynn that big yield. we heard from mary garber yesterday. has two problems. one it doesn't buy natural gas. seems like, it right? it buys natural gas futures contracts and that means the finesance has to roll these every month. selling the old ones. buying the new ones and when prices for natural gas in the future are higher know that the current price like they are now and then the ung will lose you money every month, every month, every month. second problem don warned us about two weeks ago is the ung stopped creating new shares. caused it to trade it as a massive premium to the net asset value of the futures. something that you knew would go away once it started to create shares again and that's why the etf missed out on that ral low. why you should not go near this thing especially since the new shares are coming, starting on monday. what i would do of course is ban this if i were the s.e.c. but i'm not the soc -- the s.e.c. real mouth, full. it's a power share. it's the power shares db, crude oil, double short etn. and the symbol here is dto, dave, tom, over. like should be over. this one's what's called an exchange-traded note -- how did they come up with this garbage? it works -- it's like an etf only it works like a bond, not a stock. which means it's exposed to the credit risk of the company that issued it, invesco. that's probably just the tip of the iceberg. that's the first problem. you can't hold it for more than one day or volatility will start eating into your returns. or making your losses into bigger losses. but i think it has additional problems, too. the fund tracks a basket of futures contracts to bet against oil prices and it's got a big target pain on the back of its head by the regulators. so the regulators might decide to increase position limits or impose restrictions on the number of future contracts. a fund can own. and now it really damage you if you own the dto and fin rod, the securities regulator, already said it's going to impose additional margin requirements on december 1st. another regulate or risk for the dto. what's the most worrisome issue here? >> i think it is the fund's pedigree. when the dto was first released. it was the dxo. earlier this month the dxo was shut down by its managers because it became so big it bumped up against regulate or limitations. when one. that pair goes down i start to worry about the other half the dto. i know these are all a mouthful but traded so actively, some brokerage firms, it's up to 35%. of their volume are the thanks i'm talking about. i'm not kidding that's why i'm warning you. the bottom line, a lot of bad etfs out there, toxic financial products that could blow up in your face but thanks to the great work of don. i'm not kidding. we know the worst, and we're putting them in the "sell block." fas, faz, ung and the most dangerous etf in the world the dto. roger in the sunshine state. roger? >> caller: boo-yah, jim. a ft. myers beach, sunny boo-yah to you. and thank you for all you do. >> thank you. and let me give you i hope real estate numbers bottom. i think they did. what's in your mind? >> caller: i want to know whether the lack of regulation on the etfs will give them an unfair advantage over ordinary investors, that's home gamers and is this similar? and can this lead to another collapse? >> my first eric who happened to be a form managing director of goldman sachs was in the derivative department for 17 years, he would tell you absolutely. absolutely it is an uneven playing field that the s.e.c. under christopher cox created instruments that gives some people an unfair advantage over others and you are spot on, roger, and thank you for bringing to the attention. maybe the s.e.c.'s listening. this is a pressing problem and they're spending all of their time worrying about dark pool. let's stay with florida. go to adam in florida. adam? >> caller: jim, boo-yah. my question today is on the xlf. with the financial institutions and the government t.a.r.p. rescue program. i'm looking at the xlf. to play the move in the banking industry. my strategy was to look at it buying a march 2010, $15 straddle on xlf/dtf. what is your opinion. >> you have a lot of premium. i have to tell you you remember i am a financial guy. i prefer to own individual banks that i like and short individual banks that i don't. i'm not an xlf guy. i would not go that way. i would pick the best and own them. i'm going to do that next week for the real estate investment trust. i'm going to talk about the best and the worst and how it's better than using the etf but if you want to use the etf and go short the banks you don't like that's different but i would not just thus combination play. you're going to -- spend way too much money on that. go to jeremy in kansas. jeremy? >> caller: hi, jim. how are you? >> fine, jeremy, how about you? >> caller: i'm doing very well. >> getting ready for some big 12 action this weekend? >> caller: absolutely. >> you bet. >> caller: go jayhawk. >> yes. >> caller: jim, my adviser to diversify my portfolio in mutual funds and etfs and utilized large and mid small companies. fixed income and international. my question, jim, is this a good way to grow and protect my portfolio for the long term and reduce current volatility? also, is this as efficient as using individual equities. >> no you're a mooch fund of mutual funds and the whole idea is a mutual fund itself is the diversification. your financial adviser's probably doing the right thing. i was a financial adviser. a lot of great ones. that's not my prefer