Bonds Paint Bleak Picture

You have to recognize the divergence between the total collapse in the credit markets that occurred in the last few days and a closing rally that seemed like it was a true hold of nasty levels.

I am seeing mortgage bonds made up of FICO 700 plus, Triple AAAs, trading in the 30s. That means we are in huge trouble. We have basically given up for now trying to fix the mortgage problem. I have seen high yield bonds without bids. I have seen Treasurys trade to absurdly high levels because no other paper is worth anything.

And then I see beautiful sell programs in part because Chevron (CVX - commentary - Cramer's Take) and Exxon (XOM - commentary - Cramer's Take) are being bought in huge amounts to get things rolling.

The struggle between bonds and stocks isn't and hasn't been playing out right for two years now. The stocks are signaling that we are finding a bottom. The bonds are indicating that there is no bottom in sight.

When in doubt, go with the bonds. And that is what I am doing.

At the time of publication, Cramer was long Chevron.

Know What You Own: Other stocks related to the ones mentioned above are BP (BP - commentary - Cramer's Take) , ConocoPhillips (COP - commentary - Cramer's Take), Royal Dutch Shell (RDS.A - commentary - Cramer's Take), Total SA (TOT - commentary - Cramer's Take) and PetroChina (PTR - commentary - Cramer's Take).

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