Cramer reminded viewers of another rule in book Real Money. Control your losses and the winners will take care of themselves, he said. He then instituted a new rule for the financial stocks: If a bank stock falls below $5 a share, it’s time to sell. Cramer said he doesn’t believe anything remotely positive has happened yet for the banking industry. He said he’s most worried about Downey Financial (DSL), Corus Bankshares(CORS), FirstFed Financial (FED) and BankUnited (BKUNA). He is also deeply concerned with National City (NCC), Washington Mutual (WM), and First Horizon (FHN). Cramer was also bearish on Citigroup (C), Wachovia (WB) and Bank of America (BAC), and even brokers such as Lehman Brothers (LEH) and Merrill Lynch (MER). Next, Cramer proclaimed his “year of natural gas is back!” With the successful secondary offering of shares by Chesapeake Energy (CHK) last week, Cramer said it’s finally safe to invest in natural gas stocks. He says the next opportunity is the pipeline companies. While he still believes in Spectra Energy (SE), Cramer feels that Williams Companies (WMB) is another great company to own. Cramer said his thesis is simple: the more gas there is, the more demand for gas infrastructure there will be. Williams Companies are expanding further the mid-Atlantic region, where there are millions of potential customers. The company is also building pipelines to transport more gas from the Rocky Mountains. Cramer also finds Williams’ drilling operations attractive. Williams is a company that can make money now, he said. In his quest to find stocks not levered to mortgages or the rising price of oil, Cramer talked with Catherine Burzik, President and CEO of Kinetic Concepts (KCI), for an update on her business. Burzik said she feels the company’s stock is grossly undervalued, but hopes investors begin to see the synergies realized from the LifeCell merger. Cramer said he likes the healthcare group, but wants to see one more quarter of results before recommending Kinetic. LIGHTNING ROUND: (Bullish) HERO; ARG; LH. (Bearish) WIRE; STO; DGX.

Louis Navellier’s Quantum Growth Update
Louis Navellier’s Quantum Growth Update is positive on CRMT, BPT, and PBT; cautious on ATVID, AUO, DECK, and GFA.
Louis Navellier’s Global Update
Louis Navellier’s Global Update is positive on FMS, ELN, and ESLT; cautious on KNDI and JASO.

Fast Money position recap

- First Moves: Jeff says sell INTC ahead of earnings, Joe likes NKE, Karen likes PDE, Tim likes ICA as a play on infrastructure build in Mexico.
Macke Owns (US), (WMT), (MSFT), (INTC), (USO); Finerman Owns (CSCO), (GS); Finerman’s Firm Owns (MSFT), (SUN), (TSO), (VLO), (PDE); Finerman’s Firm Is Long SPX Index Puts; Finerman’s Firm And Finerman Own (C) And (C) Leaps; Finerman’s Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY); Seymour Owns (TSL), (AAPL), (CSCO), (INTC), (MER), (MSFT)

Terranova Owns (VLO), (SA), (YHOO), (FCX), (IYT), (GOOG), (CME), (INTC), (BNI),  (LUV), (XLF), (SU); Terranova Is Short 30 Year US Bond Futures (September); Terranova Owns Dollar Index Futures (September)

Terranova is chief alternatives strategist at Phoenix Investment Partners; Phoenix Investment Partners Owns (IGE),(DBC), (DBV), (RWX), (AAPL), (AMD), (ATI), (AW), (BA), (BAC),  (BNI), (BSC), (BUD), (C), (CHK), (COH), (COP), (CSCO), (CME), (CVX),  (DAL), (DNA), (DVN), (FCX), (FNM), (FRE), (GOOG), (GS), (HAL), (HOT),  (IBM), (INTC), (ICE), (JNJ), (JNPR), (JPM), (LEH), (LUV), (M), (MEE),  (MON), (MOS), (MS), (MSFT), (NCC), (NUE), (NYX), (NDAQ), (OC), (POT),  (RBN), (RSG), (SU), (SUN), (SWKS), (TIE), (TSO), (USB), (VLO), (WB),  (X), (XOM), (YHOO)

Overseas markets were hit hard last night and this morning on worries of more financial pain in global financial markets. I have been shorting select financials and will be looking for other high probability setups within the sector until we bottom. Art Cashin said that the government may need to do a financial triage which means going into this financial battlefield and figuring out who needs help, who is worthy of help and who will be let to pass away. We may need to get a washout event in order to attain a solid short term bottom, will be looking for a VIX spike well above 30 (35ish) as a leading indicator of a possible upcoming near term bottom. Also watch the 13 week T-Bill since this is also a leading indicator of a possible cresendo (last one was the BSC event as you can see on the chart and the ^IRX leading moves going into that event) and has been showing the Fed pumping liquidity into the system in order for the market to sustain a possible future shock (IMO that event could be more bank failures like Indy Mac). These events are out of our control as traders and investors. The best thing you can do is to be defensive and to be prepared for all outcomes and to look for opportunity. I will post my watchlist in the trading room. Have focus, pick plays with a high probability of success, plan the trade and trade the plan. Great luck and great trading.